KARACHI, Aug 13: The recent sustained run-up on the stock market was decisively halted on Wednesday as investors indulged in near-panic selling fearing a law and order situation after the closure of major trading centres close to it followed by reports of city killing combined with heavy technical unloadings on the overvalued counters.

The KSE 100-share index received a massive battering, off 102 points at 4,244 eroding Rs21.569bn from the market capitalization just in one go after blue chips fell like the house of cards from the current peak levels.

The selling in part was also technically-inspired as it was long overdue in a highly overbought market but delayed as bulls were not inclined to leave the fighting arena before hitting the crucial index level of 4,500 points.

“I don’t think the current run-up is overdone as some of the basic fundamentals point to extension of the current rally,” some analysts said “bears have made an excuse of the murder of a political party or higher badla rates and business to outwit the bulls.”

The KSE 100-share tasted the big decline in the backdrop of steep rise after breaching successive psychological barriers during the last two months off 102.21 points at 4,244.66 points amid sharply reduced volume.

“It may not be the end of its meteoric rise over the last two months beyond the 4,000 point index level as the earning rally is still inconclusive,” analysts predict. “Bulls may have some rethinking on their future line of action after hitting the new target of 4,500 point.”

The index has risen about 600 points or 25 per cent during the last couple of weeks after breaching six barriers in a row from 3,700 to 4,300 without any pause and the pre-holiday selling partially eroded its overvalue stance.

But it was not the largest single-session decline as it had fallen by 125.66 points on Jan 21, 2003 and 128.55 points on July 21, 2003 on selling triggered by negative fallout of some adverse developments on the political front.

Leading base shares, notably Hub-Power, PTCL, PSO were the main target of selling followed by Shell Pakistan, which has risen by Rs50 ahead of its board meeting on Aug 19, and market talk of higher final dividend plus bonus shares. Pakistan Oilfields, ICI Pakistan, Engro Chemical and Fauji Fertilizer followed them, prompting sympathetic unloading on some other current favourites.

But on the other hand bank shares, notably National Bank and MCB came in for renewed support and tended further higher and so did some leading shares in the cement sector and blue chips on other counters.

The snap reaction appears to be technically-inspired ahead of Thursday’s closure because of public holiday on account of independence day, some others say adding the market was in a highly overbought position owing to persistent rise during the last couple of weeks and needed correction.

Many may not agree but the selling in part was also attributed closure of markets close to the KSE followed by reports of killing of unit incharge of the ruling MQM, some brokers said.

“Being highly sensitive to external negative news, the market gives in when there is tension close by as retailers hasten to take profits at the available margins fearing further fall in prices,” they added.

Massive investment of Rs22bn in the carryover market and higher badla rate, touching the recent peak level of 16.45 per cent also caused a lot of selling to meet the clearing demands, they said.

Minus signs dominated the list under the lead of energy shares, notably PSO on post-dividend (70 per cent final) and Shell Pakistan, off Rs8.45 and Rs22.60 followed by Pakistan Oilfields, National Refinery, Pak-Suzuki Motors, Adamjee Insurance, Pakistan Resource Co, Fauji Fertilizer, Packages and Wyeth Pakistan, which suffered fall ranging from Rs.4.00 to 20.00.

Some of the leading shares, however, did not toe the market’s general fall and managed to finish with fresh gains under the lead of MCB, Kohinoor Weaving, Mehmood Textiles, Honda Atlas, Millat Tractors and Grays of Cambridge, up by Rs2.75 to Rs5.50. But the largest gains ranging from Rs6 to Rs12.75 were recorded in International Industries and Al-Ghazi Tractors respectively.

Trading volume fell to 537m shares from the previous 626m shares as losers held a strong lead over the gainers at 317 to 81, with 47 shares holding on to the last levels.

Hub-Power, which received massive battering led the list of actives, off Rs2 at Rs42.75 on 67m shares followed by PTCL, lower Rs1.10 at Rs35.55 on 53m shares, FFC-Jordan Fertilizer, easy 70 paisa at Rs19.30 on 45m shares, PIAC, lower 10 paisa at Rs22 on 32m shares and Dewan Salman, off 65 paisa at Rs23 on 31m shares.

Other actives were led by National Bank, up 70 paisa on 31m shares, TRG Pakistan, off Rs1.40 on 22m shares, PSO, sharply lower by Rs8.45 on 20m shares and MCB, higher by Rs2.85 on 19m shares.

FORWARD COUNTER: Barring MCB, which rose by Rs1.95 at Rs54.75, all other speculative shares suffered sharp pruning under the lead of PSO, off Rs8.50 at Rs292.50 on 10m shares followed by ICI Pakistan and Fauji Fertilizer, lower by Rs2.80 and Rs4.25 at Rs76.20 and Rs98 on modest turnover.