KARACHI, Oct 25: Stocks on Thursday took a technical pause as leading shares beat a hasty retreat from the recent highs as the highly overbought market needed a technical correction. The KSE 100-share index was off 37.52 points at 1,362.80.

The bulk of selling was confined to Hub-Power and PTCL, which together accounted for 174m shares, out of the total volume of 254m shares, indicating that bulk of the selling was absorbed by the both. The second interim dividend at the rate of 20 per cent by Engro Chemical also seems to have fallen below the market expectations as was reflected by sharp decline in its share value.

Although the bears managed to push the market into the reverse gear, at on stage it was evident that the current run-up is overdone as the market is expected to resume its upward drive after passing through the technical correction, most floor brokers believe.

The KSE 100-share index could not sustain the coveted index level of 1,400 points owing to heavy selling in the leading base shares, the PTCL and Hub-Power, and finished lower by 2.5 per cent or 37.52 points at 1,362.80 as compared to 1,400.32 a day earlier, reflecting the weakness of base share.

However, there was no evidence of strong selling from any of the foreign funds, although some of them did straighten their technical positions without indulging in long liquidation.

The reports from across the Line of Control may not be too encouraging in the backdrop of counter threats, the market seems to have followed its own dictate rather than negative external factors, stock analysts at the W.E. Financial Services said.

“Essentially, it was a technical correction long overdue in a heavily overbought market,” they say. “The index has risen by 137 points to 1,400 just in a couple of sessions and needs to be checked to restore respectability to the recent price flare-up.”

“We don’t think the market’s upward drive has been halted,” stock analysts at the Finex Securities predict. “A technical correction in an overbought market was inevitable.”

Stock analysts at the Moosani Securities believe the index could fluctuate between 1,450 to 1,500 points for the near-term after passing through a needed correction as basic financial fundamentals will not allow them to leave the arena at this consolidation phase.

A second interim dividend at the rate of 20 per cent (first being of an identical amount) by Engro Chemical Pakistan, did not receive a positive response from investors as it came in for strong selling at the overnight higher level, falling by Rs.2.85 at 54.75. Last year it has given a cash dividend of 70 per cent plus bonus shares of 20 per cent.

Energy shares led the market decline under the lead of PSO, Pakistan Oilfields and Shell Pakistan, which suffered fall ranging from Rs.3.35 to 8.50 on persistent profit-selling.

Other prominent losers included IGI Insurance, Millat Tractors, Dawood Hercules, Engro Chemical, ICI Pakistan, Fauji Fertilizer, Bolan Casting and Sitara Chemical, off Rs.1.75 to 2.90.

Attock Refinery ahead of its board meeting on Oct 29 came in for active support, and was quoted higher by Rs.4 followed by Lever Brothers, up Rs.17. Orix Leasing, PILCORP, Muslim Insurance, Sapphire Textiles, Crescent Steel and Treet Corporation also rose by one rupee to Rs.1.30.

Trading volume was maintained on the higher side at 254m shares but losers forced a strong lead over the gainers at 137 to 54, out of 237 active shares.

Hub-Power came in for strong selling, off 70 paisa at Rs.21.65 on 124m shares followed by the PTCL, lower 75 paisa at Rs.17.40 on 70m shares, the PSO, off Rs.3.35, at Rs.110.90 on 11m shares, Engro Chemical, down Rs.2.85 at Rs.54.75 on 8m share and ICI Pakistan, easy 60 paisa at Rs.43.40 on 7m shares.

Other actives were led by Fauji Fertilizer, off Rs.1.75 on 4.416m shares, Adamjee Insurance, lower Rs.1.40 on 3.456m shares, Japan Power, easy 15 paisa on 3.417m shares, Dewan Salman, off 70 paisa on 3.399m shares and MCB, lower 70 paisa on 3.175m shares.

FUTURE CONTRACTS: Speculative issues also followed the lead of their counterparts in the ready section and fell sharply. Engro Chemical and the PSO, which suffered fall ranging between Rs.3.40 and Rs.4.10 to 6.60 for both the settlements.