Despite a strong weekend rebound aided by higher corporate yields, the stocks remained under pressure during the preceding week. Slack demand from the financial institutions and selling by the retailers were basic reasons cited.

A further increase in petroleum prices boosted the trading of energy shares — notably the PSO, the Shell Pakistan and the Pakistan Oilfields — and allowed the market to limit its persistent losses.

However, direction of the market is still unclear, although most leading analysts predict the return of a bull market possibly by next week on technical grounds.

“The market is in a highly oversold position and could attract a lot of covering purchases at lower levels if all goes well on the political front, and the Iraq situation does not deteriorate further”, some brokers believe.

The KSE 100-share index, therefore, received a massive battering and plunged by eight per cent in the absence of demand from leading investors, including the financial traders — though the falling prices sent signals of continued sell-off on the overvalued counters under the lead of energy sector.

Snap weekend rally triggered by higher corporate earnings by most of the leading shares, notably the PTCL, the ICI Pakistan and some others did halt the downward drift but the future appeared uncertain.

The index finished about 130 points lower after breaching through the barriers of 2,500 and 2,400 points and some analysts predict it needed a further pruning to stabilize at a pragmatic and financially sustainable level of slightly below the 2,000-point level. The final close being at 2,399.15 points.

The market capitalization also recovered from the mid-week Rs548.723 billion as compared to Rs558.605 billion, off Rs10 billion, reflecting the weakness of the PTCL, the PSO and the Hub-Power.

“Bears seem to have shattered the myth of higher corporate announcements by the majority leading shares, which in normal conditions should have triggered buystops at the current dips.

Fears of the US attack on Iraq are there but it could be billed as an immediate depressant. There still could be many slips between the lip and the cup, one dealer said.

Dividend announcements by the Bata Pakistan, the Reckitt Benckiser, the Cherat Papers, the Ferozsons Lab, the Pakistan Oilfields interim at 100 per cent, the ICI Pakistan higher at 22.5 per cent, the Askari Bank bonus shares of 50 per cent and several others were on the higher side of the market perceptions but failed to stem the wrought.

“Market needs to be injected of fresh funds from the institutional traders and till they are back the downward drift may further be accentuated”, predicts a leading broker.

The falling daily volumes reflect that investors as well as the retailers have decided to ride downward, the bandwagon until the return of the bull market as warranted by technical factors.

Persistent selling in most of the pivotals, notably the PSO kept market unsettled all through the session, never allowing bulls a breathing space to strike back. Active profit-selling in auto and chemical including fertilizers shares further dampened the sentiment.

The situation on the forward counter was more depressing as some of the leading shares attracted sympathetic selling on ready counter, which in turn caused major dents in the prevailing price structure. Some of which breached through their downward circuit breaker on heavy selling.

There was, however, no matching buying from any quarters as the mid-session reports of an aircrash near Karachi killing eight persons, including an Afghan ministers, further accentuated the prevailing panic.

“The pre-Muharram sectarian killings are not a good omen at least for the near-term”, one broker said fearing, incidents of fresh violence could further depress the market in coming sessions.

The killing of nine persons just at the heels of the PAF aircrash reflects that anti-peace forces are out to destroy the investment climate after scaring the investors away, he adds.

But some others predict the market will be back on rails on the strength of good working results due from some of the leading companies, notably the PTCL, the Hub-Power, the Sui Northern Gas and the National Bank during the next couple of sessions.

Indications are that some of them including the Hub-Power and the PTCL could spring pleasant surprises for investors in the form of higher final dividend.

However, all was not bad with the broader market as leading auto and chemical shares attracted good support at dips and allowed the market to limit its decline. But the energy shares received massive battering under the lead of the PSO, the Pakistan Oilfields despite higher interim dividend of 100 per cent by the latter.

Prominent gainers were led by the EFU General, the Leggler Nafees, the Quality Textiles, the Atlas Battery, the Atlas Honda, the Jahangir Siddiqui and Co, Mari Gas after the announcement of an interim dividend at the rate of 20 per cent, and the Mitchell’s Fruits.

But the largest rise of Rs9.45 was noted in the Pakistan Refinery ahead of its board meeting and expectations of a good dividend. But later all finished reacted on late selling.

Losers dominated the list, prominent among them being the 4th ICP, the Pakistan Oilfields, the PSO, the Shell Gas, the HinoPak Motors, the Abbott Lab, the Century Papers and the Unilever Pakistan. The largest decline being recorded in the Shell Pakistan on active selling.

Trading volume remained at a low ebb, at 451 million shares as compared to 637 million shares last week as leading investors kept to the sidelines.

Bulk of it went to the credit of the Hub-Power, the PTCL, the PSO, the Sui Northern Gas, the FFC-Jordan Fertiliser, the Pak PTA, followed by the ICI Pakistan, the Pakistan Oilfields, the KESC, the Japan Power, the Telecard, the National Bank, the Fauji Fertiliser, the Engro Chemical and several others.—Muhammad Aslam