KARACHI, Sept 17: Stocks on Friday resumed their downward drift as the suspense regarding the Capital Value Tax faded under the negative nod of the prime minister and his assertion that "it is a settled issue".

There was a virtual confusion as investors anticipating a positive response from the prime minister indulged in panic-selling after the news, what they called his plain "no" reached the market.

There was, therefore, no trace of the overnight run-up as the KSE 100-share index plunged by 64 points before recovering from the day's bottom on late short-covering at the lower levels by some of the leading punters, notably in Pakistan Petroleum.

The country's bourses delegation met Prime Minister Shaukat Aziz here on Friday and, among other things, apprised him of the negative impact of the CVT on the share business. According to a KSE press release the prime minister said that it was a settled issue and if there was any problem about its implementation it could be sorted out.

The market, which resumed trading on a higher note in anticipation of prime minister's positive nod on the CVT issue, fell by 62 points on panic-selling after the delegation reported the outcome of talks to its members.

Although late short-covering by some of the institutional traders allowed it well above the day's lows, the KSE 100-share index ended with a net fall of 9.12 points at 5,045.91 as compared to 5,055.03 a day earlier.

"The prime minister appears to be unhappy with the manipulated massive decline of the market since he took over as the chief executive", some analysts said "his refusal reflects that he expected a positive market reaction to his election as prime minister but speculators took away the Shaukat Aziz factor from the share business just in one go".

The prime minister's refuse could well mean a veiled threat to the brokers to "behave properly" and play the game according to basic fundamentals of the economy and the financial reform".

Brokers said the near-term outlook appears to be uncertain as investors could play on both sides of the fence. But some others said the late recovery indicates that the financial institutions have been instructed to play their stabilizing role and buy at the current attractively lower levels.

Much of the activity remained confined to the heavy-weight Pakistan Petroleum, which allowed the market to finish well above the day's low levels. Minus signs maintained a fair lead over the gainers, major losers being International Industries, Colgate Pakistan, Javed Omer, and Grays of Cambridge, which suffered fall ranging from Rs6.30 to Rs7.15 followed by Dewan Textiles, Pak-Suzuki, Artistic Denim and Indus Motors, off, Rs3 to Rs4.30.

Some of the leading shares did not toe the market's general trend and rose under the lead of Ferozsons Lab, Unilever Pakistan, Shell Pakistan and Nestle Milk Pak, up by Rs20 to Rs32.50. Ahmed Hassan Textiles, Sapphire Textiles, Pakistan Cables, Abbott Lab, and Berger Paints followed them, rising by Rs3 to Rs5.50.

Trading volume showed a modest fall at 212m shares as compared to 237m shares a day earlier as losers forced a strong lead over the gainers at 174 to 124, with 33 shares holding on to the last levels.

The most active list was topped by Pakistan Petroleum, sharply higher by Rs2.85 at Rs112.80 on 26m shares followed by OGDC, lower 85 paisa at Rs59.80 on 24m shares, Bank of Punjab, steady by five paisa at Rs64.85 on 23m shares, PTCL, up by 40 paisa at Rs39.15 on 18m shares and D.G.Khan Cement, firm by 10 paisa at Rs54.95 on 15m shares. Other actives were led by Hub-Power, up by 50 paisa on 14m shares, Sui Northern Gas, firm by 35 paisa on 9m shares, National Bank, off 50 paisa on 8m shares, Fauji Bin Qasim, lower 25 paisa also on 8m shares and Askari Bank, easy 20 paisa on 7m shares.

FORWARD COUNTER: OGDC came in for active selling and fell by 90 paisa at Rs59.90 on 10m shares followed by PTCL, up by 65 paisa at Rs39 on 5m shares, D.G.Khan Cement, firm by 20 paisa at Rs55 on 4m shares, Hub-Power, higher by 40 paisa at Rs31.90 on 3m shares and National Bank, lower 55 paisa at Rs68 also on 3m shares. Pakistan Oilfields suffered a fresh fall of Rs1.90 at Rs210.