KARACHI, May 22: After a firm opening, the KSE 100-share index on Wednesday again received massive battering and plunged by another 4.4 per cent or 71 points at 1,527.58 on heavy selling at the fag-end of the session triggered by rumours of shooting down of an aircraft and Indian Prime Minister’s statement about a possible war.

Earlier, both the institutional traders and the financial institutions launched a massive rescue operation at the lower levels, but disturbing news from the borders, including downing of an Indian aircraft and heavy fighting along the LoC followed in quick succession, sending signals that the war has begun and the consequent fresh panic liquidation.

An idea of nervous and panic selling may well be had from the fact that corrective steps taken by the KSE to forestall further decline lost their relevance as most of the leading shares, notably PSO, Shell Pakistan and Nestle MilkPak finished around their circuit breakers.

There was, however, no details of the air battle or which country the plane belonged to, but the rumour-mongers have played the trick with the already terribly nervous investors and laughed like Nero at the debris of the market earlier poised to stage a robust recovery after firm opening.

“The market has lost over 15 per cent, eroding about Rs54bn from the market capitalization during the last three sessions after the war hysteria gripped it, greater part of which is contributed by the rumour-mongers and where the end will come is not clear,” stock analysts said.

“Investors are opting for gold and dollar after unloading long positions in stocks as both are considered safe havens in the war-like situations,” they said, adding “the outflow is massive running into billion of rupees.”

Both prices of gold and the dollar are rising steadily since war fears gripped the market. The dollar was quoted higher at Rs60.65 and Rs60.70 for buying and selling, respectively, and the gold at Rs6,210 per ten grams.

All roads may still not lead to a possible Indo-Pak war, there is no immediate possibility of easing of the prevailing tension on the borders, they said, adding “series of successive negative developments, including the killing of a moderate Kashmiri leader continue to add fuel to the fire.”

“I don’t think the market sentiment could be boosted at least for the near-term after injecting massive amounts to reverse trend,” says a leading broker and added “investors have already gone to an undeclared war and may take quite sometime to be rationale.”

The market leaders again led the decline on heavy selling and fell like ninepins under the lead of PSO, Shell Pakistan, Nestle MilkPak, Wyeth Pakistan and Lever Brothers, falling by Rs6.50 to Rs36.

Other prominent losers were led by Shafiq Textiles, Pakistan Oilfields, Siemens Pakistan, Glaxo-Wellcome, BOC Pakistan, Dawood Hercules, which suffered fall ranging from Rs3 to Rs5.75.

Some of the shares managed to look up under the lead of Millat Tractors, Gatron Industries, Ismail Industries, Lakson Tobacco and IGI Insurance, which rose fractionally, up by 50 paisa to Rs2.85.

Trading volume fell to 141m shares from the previous 171m shares as losers maintained a strong lead over the gainers at 215 to 32, with 29 shares holding on to the last levels.

Hub-Power again topped the list of most actives, off one rupee at Rs19.75m on 53m shares followed by PTCL also down by the same amount at Rs13.85 on 34m shares, Dewan Salman, lower 60 paisa at Rs11.50 on 11m shares, FFC-Jordan Fertiliser, down by 45 paisa at Rs5 on 7m shares and Pakistan State Oil (PSO), off Rs6.50 at Rs123.85.

Sui Northern led the list of other actives, off 70 paisa on 6m shares, KESC, easy five paisa on 4m shares, Fauji fertiliser, lower 65 paisa on 2m shares, Engro Chemical, off Rs2.60 on 1.771m shares and Telecard, easy 90 paisa on 1.497m shares.

FUTURE CONTRACTS: PSO also received massive battering on the forward counter also, off Rs6.50 at Rs124.10 on 3.331m shares followed by ICI Pakistan and Engro Chemical, lower Rs1.75 and Rs2.65 at Rs33.40 and Rs50.85, respectively, on modest turnover.