KARACHI, June 16: Stocks on Monday underwent mild correction at the inflated levels as the weakness of the blue chip sector spilled over to the other counters but there were buyers at the dips and larger decline was resisted. KSE 100-share index fell by 4.54 points at 3,260.09.

No one could deny the fact that the market is in a highly overbought position because of its outstanding performance both during the pre and post-budget sessions and needs correction that came in the form of a modest reaction.

But the underlying sentiment reflects that the current run-up is not overdone and it will be known after the 3,300 index level and the developing political scenario. Higher carryover business and rates could be made an excuse for an imminent big sell-off in the coming sessions.

After briefly touching its career-best at 3,281.13, on early active short-covering in most of the pivotals, it came in for strong selling spilling over from the massive carryover volume and pushed to the day’s low of 3,252.20 before recovering to close slightly better at 3,260.09, off 4.54 points.

According to some analysts carryover rates have touched the five-month high of 10.8 per cent and the badla financing figure at Rs12.3 billion, which prompted selling late in the session.

“No one could deny the fact that it is sure to hit its new target of 3,300 points and could rise further before the president’s US visit,” some analysts said “but what next no one is precisely clear and did not rule out a snap retreat to a viable level.”

The highly volatile movements of the index reflect that investors are unsure about the future outlook of the share business because of political standoff over the LFO.

“Not many are inclined to enlarge their commitments and are playing on both sides of the fence on small margins of profits,” one broker said “both the index and the market capitalization had hit their career best levels at 3,281 points and Rs730bn, lack of confidence appears to be a dominating force.”

Institutional traders enter the market with big buystops and leave the market after pushing prices of selected shares to their pre-determined profit levels keeping the index to stay erratic.

Federal budget has been passed by the ruling elite, without opposition’s participation, there is a talk of no-confidence move against the speaker after he gave a ruling that the LFO is a part of the constitution signalling a confusion but the stock market has its own perception to behave.

“Its persistent meteoric rise to new all-time peak levels may have surprised many outside analysts who think both the economy and peace give the needed push to the capital markets the world over, there could be some exceptions and local bourses are among them,” says an analyst jokingly.

Plus signs, however, dominated the list under the lead of IGI Insurance, Clariant Pakistan, Premium Textiles, Sapphire Textiles, National Refinery, Pak Premier Fund (right shares), Dewan Khalid Textiles, Jahangir Siddiqui & Co, Pakistan Paper Products, Al-Ghazi Tractors, Lakson Tobacco and Atlas Battery, which posted gains ranging from Rs2 to Rs5.

Losers were led by Unilever Pakistan, Siemens Pakistan and Parke-Davis, which suffered fall to the extent of Rs10 to Rs34 but without any adverse comment. The floating stock of all the shares is not easily available as it is reported in few hands. The former is claimed to be slight liquid.

Other prominent losers included Bannu Woollen, Gillette Pakistan, Noon Pakistan, Reckitt and Benckiser, Central Insurance and Abbott Lab, off Rs2 to Rs4.

Trading volume fell to 320m shares from the previous 429m shares as gainers maintained modest lead over the losers at 196 to 162, with 52 shares holding on to the last levels.

FFC-Jordan Fertilizer topped the list of actives amid rumours that it is being merged with its sponsor company, Fauji Fertilizer, up 65 paisa at Rs13.80 on 76m shares followed by the

PTCL, steady by 10 paisa at Rs27.40 on 46m shares, Sui Northern Gas, firm by 10 paisa at Rs35.15 on 18m shares, PSO, lower by Rs1.20 at Rs220.30, Pakistan Oilfields higher by Rs1.50 at Rs209.50 on 13m shares, Hub-Power, easy five paisa at Rs35.85 on 10m shares.

The other actives were led by Dewan Motors, lower 40 paisa on 13m shares, D.G. Khan Cement, easy 20 paisa on 11m shares, Bosicor Pakistan up 40 paisa on 10m shares and Dewan Salman, off 60 paisa at Rs17.85 on 9m shares.

FORWARD COUNTER: Speculative issues on the forward counters slight eased on active profit-selling as seven shares fell and only four rose.