KARACHI, Jan 2: A massive sell-off was witnessed the Karachi Stock Exchange on Wednesday amid deteriorating law and order situation in the country's financial capital, rising political uncertainty and also due to a technical correction, dealers said.

“The stock market witnessed panic-selling across the board on rising political noise amid a call for long march on Jan 14 for a powerful caretaker setup ahead of elections,” said Ahsan Mehanti from Arif Habib Ltd.

The KSE 100-share index ended 1.82 per cent, or 304.88 points, lower at 16,489.99 points. It traded in a broad range as it made an intra-day high at 16,808.13 points and an intra-day low at 16,379.52 points.

Turnover increased to 241.22 million shares compared with 119.68m shares on Tuesday. Trading value rose by almost Rs3.5 billion to Rs5.56bn from Rs2.14bn in the previous trading session, but the market capitalisation fell to Rs4.13 trillion from Rs4.22tr on Tuesday.

The market came under heavy selling pressure with political noise, poor law and order conditions and weak macros combining to override attractive valuations and recent positives such as soft CPI and release of Coalition Support Funds.

That said, after the stellar rally in 2012, market participants were anticipating a correction in early 2013 where post near-term weakness, the market’s valuations and strong corporate profitability should drive another rally across the year,” said Raza Jafri, head of research at AKD Securities Ltd.

The current security situation of Karachi is also a grave concern for investors, brokers said.

The energy sector, the heaviest weighted sector, once again witnessed selling pressure as Oil and Gas Development Co Ltd ended Rs4.52 lower at Rs187.40, Pakistan Oilfields shed Rs3.42 to close at Rs432.70 and Pakistan State Oil closed Rs3.77 lower at Rs227.12.

Foreign investors remained net sellers as they sold shares worth a net $2.39 million on Wednesday, compared with buying a net of $134,125 the previous trading session. In December there total net selling to $7.61m. For 2012, foreign investors bought shares worth a net $122.76m.

Banks were the major buyers in the market as they bought equities worth $5.75m. However companies sold shares worth a net $3.06m while individuals sold a net $3.82m.

The biggest gainer was Unilever Food which ended Rs100 higher at Rs4,400, followed by Unilever Pakistan which closed Rs69.38 higher at Rs10,069.38.

Nestle Pakistan witnessed the biggest loss as it shed Rs133.33 to Rs4,600 followed by Bata Pakistan, which fell Rs50.50 to close at Rs1241.50.

The KSE-30 index ended 1.60pc, or 219.20 points, lower at 13,475.74.

Out of the 364 companies traded, the value of just 31 increased, 326 decreased while 7 remained unchanged.

The second and third tier companies dominated the 10 most active traded stocks: Jahangir Siddiqui Company Ltd ended 81 paisa lower at Rs14.77 on turnover of 15.31 million shares, Byco Petroleum closed at its lower limit, after decreasing by Re1 to 13.10 on 13.9m shares and Pakistan International Airlines ended 60 paisa lower at Rs3.82 on 13.78m shares.

Fauji Cement decreased by 21 paisa to Rs6.21 on 12.77m shares, Bank of Punjab ended 79 paisa lower at Rs8.92 on turnover of 8.96m shares and Maple Leaf Cement shed 54 paisa to Rs14.05 on 7.115m shares.

KESC fell 33 paisa to Rs5.44 on 7.09m shares, Azgard Nine ended 53 paisa lower at Rs7.27 on 6.15m shares and NIb Bank shed 9 paisa to close at Rs2.43 on 6.10m shares. Nishat Chunian POwer ended 44 paisa lower at Rs20.46 on 5.57m shares.