KARACHI, May 13: Stocks on Tuesday failed to sustain the earlier run-up and reacted, as a prominent section of retailers took profits at the inflated levels in the absence of strong follow-up support from the institutional traders.

It appears to be Monday’s repeat performance as investors hastened to take profits at the available margins after the institutional traders withdrew to the sidelines toward the close of the session.

Reports from across the border were not that disappointing in the backdrop of positive peace feelers from the Indian highups and reports of resumption of talks possibly by the first week of the next month.

The KSE 100-share index fell by 17.17 points to close at 2,956.14 after hitting the day’s highest at 2,981.18 and the lowest at 2,947.18 as leading base shares tended further lower.

The earlier run-up was attributed to KSE budget proposals seeking tax exemption on capital gains, waiver of 10 per cent tax on dividend incomes and more incentives for the listed companies.

Some local irritants, notably reports of failure of talks on the LFO issue and threat of march on Islamabad by a political party may have dampened the investor interest to go for fresh buying.

“No one could deny the fact that the market is in a highly overbought position in the backdrop of recent sustained run-up, and needs correction,” analysts said. “The technical reaction appears to have set in at the inflated levels.”

The other negative factor was the reports of fresh talks with the Independent Power Producers (IPPs) including Hub-Power on cut in power rates after giving them some incentives to offset the possible losses on that account.

Local industrialists as well as Wapda are complaining about the higher cost of the energy and its adverse impact on exports and the government intends to re-open the issue with the IPPs to find out ways to cut the current power rates, which are claimed to be uneconomic for the industrial growth.

The weakness of the energy sector followed by reports of reopening of the power purchase contract with the IPPs, who are operating under an agreed rate of return, did take its toll on the broader market, some brokers said.

However, the talk of the index level of 3,000 still holds good but it will be achieved after the overdue technical correction and, of course, backed by positive developments both on the local and external political developments.

Shell Gas and Siemens Pakistan, which has been under pressure for the last couple of sessions led the gainers, up Rs8 to Rs24, followed by National Foods, Noon Pakistan, Dreamworld, Gillette Pakistan, Ferozsons Lab, Shell Pakistan, Packages, Goodluck Industries, Reckit and Benckiser, Dilon, Ghazi Fabrics, Burewala Textiles and Wyeth Pakistan, up Rs2 to Rs6.

Prominent losers included PSO, Pakistan Refinery, Abbott Lab, Berger Paints, Clariant Pakistan, Glaxo-SKF, Grays of Cambridge, Transpak Corporation, which suffered fall ranging from Rs2 to Rs4.75.

Traded volume rose to 178m shares from the previous 163m shares, but losers maintained a fair lead over the gainers at 187 to 164, with 65 shares holding on to the last levels.

Hub-Power came in for active selling, easy 10 paisa at Rs34.70 on 31m shares followed by Sui Northern Gas, off 80 paisa at Rs30.65 on 27m shares, PTCL, lower 10 paisa at Rs25.25 on 22m shares, D.G. Khan Cement, firm 15 paisa at Rs16.70 on 17m shares, PSO, off Rs3.20 at Rs205.10 on 10m shares, and Southern Electric, steady five paisa at Rs15.65 on 8m shares.

Other actives were led by Lucky Cement, firm by 15 paisa on 8m shares, KESC, lower 15 paisa on 5m shares, Bosicor Pakistan, up 15 paisa on 4m shares and Pak PTA, easy 15 paisa on 3m shares.

FORWARD COUNTER: Speculative issues on the forward counter also came in for active profit-selling at the higher levels and fell by Rs1.10 to Rs3.45 for Sui Northern Gas and PSO at Rs30.35 and Rs205.50 on 9m and 7m shares respectively.