KARACHI, April 21: Stocks on Wednesday plunged by about three percent or 159 points amid panic selling in Hub-Power triggered by rumours of technical fault in some of its generators and partial suspension of operations.
The fall was massive as it wiped out Rs42bn from the market capital just in one go as most viable shares fell like house of cards. But analysts predict, there may not be a repeat performance when the trading resumes tomorrow as bulls have already initiated rescue operation at the fag-end of the session.
Bears who have been looking for some negative news for the last two months finally outwitted the bulls after having indulged in massive sympathetic liquidation in some other current favourites and overvalued shares intensifying the panic created by the Hub-Power rumours.
"There may or may not be a technical fault in the Hub-Power turbine, but bears sold the idea with a professional touch leaving bulls licking their wounds just sitting on the sidelines," one analyst said. "Although bear onslaught was well-managed toward the close, panic was still there."
There was, however, no word from the management on the strong rumours but well-informed sources claim partial suspension in the plant's operations in some of the power units till the closing bell.
After opening about 45 points higher, the KSE 100-share index plunged by 170 points or 3 per cent after the rumours of failure of the Hub-Power generator reached the market creating panic-like conditions in the corridors of the KSE.
It closed the session at 5,432.94, breaching the barrier of 5,500, off 159.74 points or 2.84 percent as compared to 5,591.66 a day earlier as all leading base shares including PTCL and OGDC received heavy battering.
Hub-Power share after opening higher finished with a sharp setback of Rs1.70, considered a massive pruning in a single-session in a blue chip of its financial stature, analyst said. It ended slightly above the day's low of Rs36.05 at Rs36.30.
Analysts said the market was in a highly overbought position but leading bulls were not inclined to loosen their grip on the price line at least for the near-term. But some others were awaiting an opportunity to re-enter the market at the lower levels, notably on the counters where the appreciation of P/E is almost ensured.
"Both the bulls and the bears were looking for an opportunity to outwit each other," says a leading operator commenting on the market's snap plunge. "The Hub-Power rumour provided the much-needed depressant."
But most analysts predict bears may not be able to intensify the current wave of selling, although technical factors including higher carryover rates warrant as was reflected by strong buying at dips, notably in most of the pivotals.
Sharp decline on all the counters dominated the list leading losers being Javed Omer, off Rs34.90 followed by Attock Refinery, PSO, Pakistan Oilfields, Al-Ghazi Tractors, National Refinery, Glaxo-SKF and Dawood Hercules, which suffered fall ranging from Rs5 to Rs10.10.
Some of the leading shares did not toe the market's general decline and managed to finish with extended gains, notably among them being Shell Gas, up Rs17.50 followed by PNSC, Fauji Fertilizer, Shell Pakistan, Bannu Woollen, Muslim Insurance, Siemens Pakistan, Noon Sugar and EFU Life Insurance, and Dreamworld up by Rs2.80 to Rs7.50.
Meanwhile, provisionally listed, Callmate Telips made its debut at the face value of Rs10 and steadily rose to close at Rs16 in a falling market on 0.486m shares. Trading volume rose modestly to 718m shares from the previous 669m shares as gainers trailed far behind the losers at 77 to 308, with 41 shares holding on to the last levels.
OGDC topped the list of most actives, off Rs2.25 at Rs67.15 on 181m shares, Hub-Power, lower by Rs1.60 at Rs36.30 on 93m shares, PTCL, easy 95 paisa at Rs43.60 on 58m shares, Fauji Cement, lower one rupee at Rs17.10 on 47m shares and DG Khan Cement, off Rs3.15 at Rs60.15 on 43m shares.
Other actives were led by Sui Southern Gas, off Rs1.85 on 25m shares, National Bank, up Rs1.42 on 22m shares, Nishat Mills, lower Rs2.90 on 20m shares, PIAC, off Rs1.25 on 17m shares and FF Bin Qasim Fertilizer, off 85 paisa also on 17m shares.
FORWARD COUNTER: Speculative issues on the cleared list also followed the lead of their counterparts in the ready section and fell sharply in unison on selling.
Hub-Power led the list of actives, off Rs1.85 at Rs36.45 on 18m shares, followed by PTCL, lower 85 paisa at Rs43.80 on 17m shares, PSO, off Rs7.20 at Rs276.30 on 4m shares and Sui Northern Gas, lower Rs3.25 at Rs68.50 on 4m shares.
MCB, Nishat Mills, Fauji Fertilizer, ICI Pakistan also fell by Rs2.90 to Rs4.40, the largest decline of Rs4.90 being in Engro Chemical.
DEFAULTER COS: All the leading shares came for active selling and fell modestly under the lead of Standard Bank, easy 10 paisa at Rs9 on 0.386m shares followed by Dandot Cement, lower 60 paisa at Rs7.20 on 0.296m shares and Biafo Industries, off 75 paisa at Rs10.60 on 0.177m shares.
