KARACHI, Jan 23: The KSE 100-share index on Thursday plunged by another 122 points or four per cent on heavy selling in all the pivotals triggered by reports of notices to brokers for overstretching their capital adequacy financial limits and allied settlement problems in the carryover market.

The opening was perfectly in line with the bull perceptions and their strong presence reflected that the current correction is overdone. But the reports of notices to a dozen brokerage houses reversed the early initial firm trend owing to hasty selling. A massive decline of Rs25.462bn at Rs577.281bn sent shock waves among the investors, the net loss during the last four sessions being Rs72bn considered to be an alarming figure to trigger fresh panic selling.

Even a record after-tax profit of Rs2.06 billion and 60 per cent cash dividend by the oil giant, Pakistan State Oil (PSO) failed to stem massive selling both from the weakholders and some leading investors and allowed the extended bear onslaught.

The KSE index finally ended around 2,617.49 points, losing about 336 points or 10 per cent during the last four sessions eroding about 45 billion from the market capitalization.

The reports of issuance of notices of capital adequacy by the Security and Exchange Commission of Pakistan (SECP) to a dozen brokers warning them of having overstretched themselves of their financial limits and the consequent settlement problems on the carryover market.

“The rout of the bulls may not be yet complete,” one broker predicts. “The investor morale appears to be edging to new lows despite attempted mid-session rallies being staged by the financial institutions to support the market.”

The developing crisis on the carryover business seems to have now lost its relevance after the fall in badla rates to 24 per cent or slightly below it but short-term dealers and jobbers are interested in fresh unloading rather than going for fresh buying at the dips.

Analysts said the market could suffer fresh erosions on the weekend session also but next week could witness a major change in the prevailing bearish psychology as board meetings of Engro Chemical, Fauji Fertilizer and some other leading shares are due next week, which could reverse the trend aided by positive announcements by them.

Most of the leading and overvalued shares suffered fresh sharp fall, leading among them being Pakistan Oilfields, PSO, Siemens Pakistan, Shell Pakistan and Unilever Pakistan, off by Rs9.80 to 59.50.

Other major losers were led by Javed Omer, Lakson Tobacco, National Refinery, Pakistan Refinery, Pak-Suzuki Motors, Clariant Pakistan, Fuaji Fertilizer, Engro Chemical and BOC Pakistan, off Rs3.20 to Rs7.75.

Some of the second-liners, notably Pakistan Cables, Faisal Spinning, Blessed Textiles, Rafhan Maize Products and Shell Gas did not follow the market’s general trend and posted gains ranging from Rs2 to Rs10.50.

Trading volume showed a modest expansion at 385m shares from the previous 372m shares but losers maintained a strong lead over the gainers at 283 to34, with 33 shares holding on to the last levels.

Hub-Power again topped the list of most actives, off Rs1.60 at Rs35.40 on 141m shares followed by PTCL, lower Rs1.05 at Rs22.75 on 72m shares, PSO, off Rs10.85 at Rs206.65 on 23m shares, Sui Northern Gas, easy Rs1.20 at Rs23.20 on 18m shares and FFC-Jordan Fertilizer, lower one rupee at Rs.10.80 on 16m shares.

Other actives were led by Fauji Fertilizer, off Rs3.20 on 15m shares, KESC, easy 50 paisa also on 14m shares, Pak PTA, off one rupee on 12m shares, National Bank, lower 95 paisa on 10m shares and D.G.Khan Cement, easy 85 paisa on 6m shares.

FORWARD COUNTER: Hub-Power came in for massive selling and fell by Rs1.85 at Rs35.50 on 47m shares followed by PTCL, lower Rs1.15 at Rs22.70 on 21m shares and PSO, sharply lower by Rs10.90 on 13m shares.