KARACHI, May 2: Stocks on Monday resumed trading on a terribly bearish note on near-panic selling by all and sundry amid reports that the SECP has not accepted the latest KSE proposals on free float and some other issues considered to be market irritants. Owing to heavy battering in the massively capitalized oil shares the market capital also suffered a sharp fall of Rs70.207bn at Rs1,935.785bn.

The last week’s increase in cut-off yield on 6-month treasury bills also rang alarm bells in the market amid fears of liquidity problems if the yield was further increased. The KSE 100-share index, which resisted fresh decline last week, was subjected to massive battering as bulk of the selling remained confined to leading base shares, notably OGDC, PTCL, PSO, National Bank and Pakistan Oilfields. All fell like ninepins from their recent highs but without finding support even at the falling prices.

A KSE delegation, which met the SECP officials in Islamabad last week with certain new proposals to pull the market out of the current state of uncertainty, is said to have failed to convince the market regulator and an official statement by the KSE late Friday worked against the underlying sentiment.

But a leading stock analyst said it was the investor concern about the interest rates as hinted at by the central bank governor and any raise even a modest one could significantly change the yield feasibility.

“Why investors are shy to re-enter the market even at the attractively lower levels”, he asks “it is because of this fact that their chief concern is the return on their investment”.

“Our yield feasibility now works at 10 per cent plus as against previous 8.5 per cent”, he says adding “stocks above this yield could find support that too in a normal trading conditions”.

The market has its own psyche and mostly works within it. “If it is rising it may rise beyond its mandate and fall in the same fashion and now it is in that cycle”.

All the leading shares where the capital gains were still intact came in for active selling and fell like house of cards, energy shares being in the forefront of losers.

Energy shares led the marked decline under the lead of PPL, Shell Pakistan, Pakistan Oilfields and PSO, off Rs7.95 to Rs18.40 followed by Pakistan Refinery, Dawood Hercules, Artistic Denim, Javed Omer and Arif Habib Securities, off Rs7.70 to Rs13.

National Refinery was leading among the gainers, up by Rs18 on higher interim sales, followed by Shahtaj Sugar, Yousuf Textiles, Pakistan Paper Products, Murree Brewery and United Sugar, up by Rs2 to Rs5.55.

Trading volume fell to 118m shares from the previous 160m shares as investors kept to the sidelines apparently trying to know why everybody is in a haste to get out of the market. Losers forced a strong lead over the gainers at 268 to 59, with 28 shares holding on to the last levels.

PTCL led the list of actives off Rs3.05 at Rs58.80 on 24m shares followed by OGDC lower by Rs4.75 at Rs90.85 on 15m shares, D.G.Khan Cement, easy Rs3 at Rs57.50 on 9m shares, National Bank, off Rs4.80 at Rs91.90 also on 9m shares, PSO, lower Rs16.20 at Rs349.80 on 8m shares, Pakistan Oilfields, off Rs13.50 on 4m shares and Pakistan Petroleum, off Rs7.95 at Rs151.95 also on 4m shares.

Fauji Fertilizer Bin Qasim followed them, lower Rs1.45 on 4m shares, Pakistan PTA, easy 65 paisa on 7m shares and Hub-Power, off 75 paisa on 3m shares.

FORWARD COUNTER: PSO led the list of actives on this counter, off Rs18.30 at Rs347.70 on 3m shares followed by PTCL, lower Rs2.10 at Rs59.65 also on 3m shares, and PPL, off Rs8.05 at Rs153.75 on 2m shares.