KARACHI, Nov 13: Stocks on Thursday retreated from the last two sessions highs amid late hour selling in leading base shares triggered by confusion over the central bank’s relief package meant to forestall hasty liquidation from the share business. The KSE 100-share index fell by 40.88 points at 3,832.32.

The confusion over the central bank relief period to banks to adjust their share portfolios to 20 per cent of their equities seems to be the chief factor behind the investors’ second thought on building up new portfolios at the lower levels and most of them opted for profit-selling, analysts said.

The KSE highups maintain that the central bank has allowed two years period to comply with its new prudential rules, while some of the officials of the bank denied and say the relief is allowed up to Oct 2004, for about a year or after the new prudential rules are implemented.

But confusion is expected to prevail until details of the agreement are not released either by the State Bank or the KSE highup, brokers said.

However, the possibility of fresh panic liquidation from the financial institutions is remote, although they may not take part in daily proceedings in a big way for a certain period of time, they said adding “the last minute panic selling in the leading indexed shares, however, tells a different story.”

“Two years adjustment period is not that important, banks could comply with the State Bank demand just in a couple of months or within a year, the important thing is that will the market absorb the shock selling,” they ask.

The market had already fallen about 700 points or 30 per cent during the last about six weeks from 4,604 to 3,745, eroding over Rs110bn from the market capital, the fresh wave of institutional selling could mean anything to it, they said.

Although the KSE 100-share index remained in the negative zone with fractional decline throughout the session, heavy selling in most of the pivotals just five minutes before the close reverse the trend.

It finally ended with a fall of 40.88 points at 3,843.32 as compared to 3,884.20 a day earlier as all the leading base shares fell in unison on active selling.

Bulk of the selling remained confined to the leading base shares under the lead of PSO, PTCL, Hub-Power followed by high-priced energy and cement shares.

All was not bad with the broader market as a good number of leading shares managed to finish with fresh gains, major gainers among them being Javed Omer, Clover Pakistan, Nestle MilkPak, Ghani Glass, Millat Tractors, and Packages, up Rs4 to Rs8.50, followed by Jamal Din Wali Sugar, Al-Ghazi Tractors, Jahangir Siddiqui Company and bank and Honda Atlas, which posted gains ranging from Rs2.20 to Rs3.70.

Losers were led by Adamjee Insurance, Gatron, Lakson Tobacco, Pakistan Oilfields, HinoPak Motors, Pak-Suzuki Motors, Clariant Pakistan, Ferozsons Lab, Glaxo-SKF, BOC Pakistan, Island Textiles and PSO, which suffered fall ranging from Rs2 to Rs6.15.

Meanwhile, the KSE has expanded the number of groups of listed companies from 27 to 35 in an apparent bid to increase the volume of trading and to attract more buyers in the share business.

Trading volume fell to 163m shares from the previous 175m shares as losers held a modest lead over the gainers at 128 to 106, with 43 holding on to the last levels.

The most active list was again topped by FFC-Jordan Fertilizer, off 75 paisa at Rs18.35 on 41m shares followed by the PTCL, lower 25 paisa at Rs32 on 13m shares, Dewan Motors, off 50 paisa at Rs23 on 12m shares, DG Khan Cement, lower Rs1.70 at Rs38.15 on 11m shares and PSO, off Rs6.15 at Rs250.75 on 10m shares.

Other actives were led by PICT, off one rupee on 9m shares, TRG Pakistan, lower also by one rupee on 8m shares, Hub-Power, off 45 paisa on 7m shares, Dewan Salman, lower 40 paisa on 5m shares and ICI Pakistan, unchanged also on 5m shares.

FORWARD COUNTER: FFC-Jordan Fertilizer also led the list of actives on this counter, off 75 paisa at Rs18.35 on 8m shares followed by PSO, sharply lower by Rs6.20 at Rs251.40 also on the same amount, PTCL, easy by 30 paisa at Rs32.05 on 5m shares, Hub-Power, off 55 paisa at Rs34.65 on 4m shares and ICI Pakistan, lower 25 paisa at Rs74.080 on 1m shares.