KARACHI: Selling all across the board sent stocks into tailspin on Wednesday with the KSE-100 index closing 2 per cent or 423.25 points down at three-month low of 21,657.22 points.

Investors were at the edge of their nerves over the small foreign outflow of $0.09 million the day ago and a heavy sell-off early in the day in Hub Power Co sparked speculation of foreign selling in the biggest Independent Power Producer (IPP).

Hub Power dipped to its ‘lower circuit’ of 5 per cent.

As nervous and weak investors ran for cover, prices of as many as 264 stocks declined against only 59 gainers.

The figures released by the National Clearing Company of Pakistan (NCCPL) in the afternoon were, however, comforting as foreign investors had bought shares of the net value of $0.73 million on Wednesday, dispelling impressions of sizeable outflows.

Among local participants also, except the mutual funds that sold off $5.78 million worth shares to re-adjust portfolio or meet redemptions, other individual and institutional investors were on the buy side.

Companies and banks purchased equity of the value of $0.52 million and $1.83 million, respectively while contrary to the rumours that made the rounds during the day, individuals were also net buyers of stock worth $2.75 million.

There was nothing negative in the news flow to trigger a heavy sell-off witnessed on Wednesday and major market players said that with only three trading session left before the Eid-ul-Azha holidays, trading interest was likely to be dull and market to remain range bound.

On Wednesday, however, turnover improved 32pc to 124m shares, from 94m shares the earlier day. However, as some of the second and top-tier stocks came under selling pressure, the trading value was up to Rs4.275bn, from Rs2.885bn. Market capitalisation eroded by Rs85bn to Rs5.160 trillion.

Dealers at Sherman Securities said that higher inflation expectations in the coming days also dampened sentiments. Fears of hike in interest rates in the upcoming Monetary policy, which is due sometime next month, also kept investors on a cautious note. Analyst Ahsan Mehanti stated that the stocks fell across the board amid thin trade on fears of possible foreign selling in emerging and frontier markets as US debt default looms. Major fall in global stocks and commodities, dismal local oil and gas production data for 1Q13 and IMF indications for likely higher inflation impacted the sentiments.

However, institutional support appeared to be present in selected state-owned enterprises that are likely to be put up for privatisation.

Analyst Fahad M. Ali observed that the index witnessed a mid-week correction where it made low at 21,632 points. Absence of interest from high net worth individual investors and institutions widened the spread between buyers and sellers which hurt the volume.On the 10-top traded list, Hub Power Company on the day’s highest single scrip volume of 13m shares, closed down to Rs3.17 at Rs60.65.

Bank of Punjab, the small investors’ pet, fell 46 paisa to Rs10.31 on 8m shares; Telecard shed 60 paisa to Rs5.19 on 8m shares; Fauji Cement, was down 31 paisa to Rs10.36 on 6m shares; PTCL was lower by 76 paisa to Rs25.36 on 5m shares; Askari Bank (right shares) declined 26 paisa to Rs1.51 on 5m shares; Bank Al-Falah was off 67 paisa to Rs20.91 on 4m shares; Jah.Sidd.Co. was down 29 paisa to Rs7.99 on 3m shares; Maple Leaf Cement lost 55 paisa to Rs20.95 on 3m shares and the stock in PIA was down 46 paisa to Rs7.59 on 3m shares.