KARACHI, Sept 19: Stocks on Friday failed to extend the overnight run-up and ran into weekend profit-selling followed by conflicting reports about the proposed deal on the LFO between MMA and the government. The KSE index again reacted by 85.75 points at 4,389.31.

Opposition’s threat to launch an agitation against the government if the deal was not signed on the contentious issues of the LFO under the agreed formula worried investors, notably the weakholders who had built-up long positions in anticipation of a deal.

“The situation on the LFO is unclear”, one analyst think but hopes that “market will follow its own technical demands in the sessions to come rather overawed by the LFO issue” and order situation after the opposition’s threat of agitation.

The KSE 100-share index managed to hold on to a half of its overnight gain of 182 points but weekend selling together with political uncertainty worked against the underlying sentiment. It finished with a fall of 85.31 points at 4,389.31 as compared to previous 4,475.06 points.

Official silence on the final bidding date for the sell-off of controlling shares of PSO also attracted a lot of selling in its share, which has risen sharply higher a day earlier.

Analysts said fears that the proposed deal between the MMA and the government may not be signed as earlier stipulated as both have refused to accept some of them major demands of each other.

“President’s re-election through the parliament and his cut off date for his uniform are claimed to be two contentious issues on which both are rigid”, they added.

The market could move further lower during the next week but the possibility of a major further shakeout appears to be remove as some of the best corporate announcements are around.

The correction and recovery are some of the essential parts of the stock trading but as far as the basic market fundamentals are concerned they are mostly bullish sans negative news from the political front.

“Owing to higher yields on T-bills during the last two auctions, stray amounts outflowed to the money market from the stocks”, says a leading broker “but it is a normal phenomenon as huge amounts of cash do outflow and inflow depending the return on investment and is not considered a market factor”.

Most leading brokers say it may be foolish to think of a bearish market at this stage as some good news are still around and once the sanity returns to the political scene the index level of 5,000 may not be that far off.

Energy and auto shares again led the market decline being in overvalued positions and fell sharply and so did blue chips in the chemical, cement, and synthetic sectors. Most of the textile shares managed to finish with fresh good gains on active short-covering followed by reports of higher exports.

Minus signs dominated the list, major losers being PSO, Shell Pakistan, Pakistan Refinery, Pakistan Oilfields and Javed Omer, off Rs8.40 to Rs23 followed by Tri-Pack Films, Glaxo-SKF, Cherat Papersack, Attock Refinery, Central Insurance, and Jahangir Siddiqui & Co, which suffered fall ranging from Rs4 to Rs5.95. There were several other notable losers also.

Some of the leading shares on the other hand managed to finish higher under the lead of Atlas Battery, Packages, Unilever Pakistan, Rafhan Maize and Treet Corporation, up by Rs6 to Rs24.95. Other good gainers were led by Artistic Denim, Rupali Polyester, BOC Pakistan, Pak-Suzuki Motors, Thal Jute, and Atlas Honda, which rose by Rs2 to Rs3.60.

Trading volume fell to 429m shares from the previous 480m shares as losers forced a strong lead over the gainers at 222 to 107, with 35 shares holding on to the last levels.

The most active list was topped by FFC-Jordan Fertilizer, up by 40 paisa at Rs19.25 on 76m shares followed by PTCL, off 65 paisa at Rs38.45 on 62m shares, Hub-Power, lower 85 paisa at Rs39.10 on 43m shares, PSO, off Rs8.40 at Rs294.75 on 33m shares and National Bank, easy 45 paisa at Rs51.40 on 22m shares.

Other actives were led by Fauji Cement, off 55 paisa on 19m shares, Pak Premier Fund, up by Rs1.15 after the dividend announcement on 16m shares, ICI Pakistan, off Rs1.75 on 14m shares, PIAC, lower by 85 paisa on 13m shares and Pakistan Oilfield, off Rs20.35 on 12m shares.

FORWARD COUNTER: PSO came in for strong selling and fell sharply lower by Rs7.60 at Rs290.35 on 13m shares followed by MCB, Nishat Mills, Sui Northern and Engro Chemical, which suffered fall ranging from Rs1.45 to Rs2.80. PTCL was actively traded, off 90 paisa at Rs38.60 on 15m shares followed by Hub-Power, easy 95 paisa at Rs39.20 on 10m shares, FFC-Jordan Fertilizer, up 45 paisa at Rs19.25 on 6m shares and ICI Pakistan, off Rs1.35 at Rs85.20 on 2m shares.