The stocks last week were in a terribly bad shape as the mid-week suicide bomb attack pushed them into reverse gear followed by the massive panic-selling on all counters.

The KSE 100-share index lost about six per cent during the sell-off and over Rs23 billion from the market capitalization in just three sessions.

The KSE 100-share index has breached through two psychological barriers of 1,900 and 1,800 points in mere three sessions, and as the fears of further violent acts are abound it may not be that easy to put a perfectly sound market back on rails just in a go.

In the absence of foreign investors who, for the time being, are on their way out, the institutional traders alone may not be in a position to resume the healing process atleast for the near-term.

While the investors were still in the process of recovering from the shock of suicide attack, bad news came from Hubco about a major default in the generator transformer of unit 4. The management is trying to put it in operation as soon as possible but in the meantime, the speculative forces mauled its share after indulging in hasty selling.

The suicide bomb attack killing more than a dozen persons, including foreigners, halted the Karachi market’s upward drive as despite a strong institutional intervention during the post-blast sessions to bolster investor confidence, the future share outlook appeared uncertain.

“It was a big jolt for a market poised to touch new highs backed by the perceptions of internal peace and steady inflow of foreign funds”, says a leading KSE member and fears that the Wednesday’s bomb attack could be a prelude for more thus pushing the buying interest to a low ebb”.

The steep decline in share values of most of the MNCs did reflect the outflow of portfolio investment but what worried analysts was the future thinking of the fund managers on the post-blast trading scenario.

But a considerable shrinkage in the daily volume, notably in the post-blast sessions indicate that the jobbers, the short-term dealers and the day traders are still in a shock and stayed away.

However, in contrast, the share of a provisionally listed new refinery in the private sector, Bosicor Pakistan came on the board well above its face value of Rs10 and finished at Rs15.50, signalling that the investors are apt to pick up the share of their choice, irrespective of the negative background news, says a leading broker.

The KSE 100-share index, which early plunged 6 per cent or 105 points on the panic selling finished below the psychological barrier of 1,800 points as its journey to the 2,000 level seems to have been intercepted at least for the near-term. It ended around 1,798.46 points as compared to 1,904.16 points, a week earlier, off 105 points or six per cent.

“All roads may not lead to the bear market in the coming sessions but fears of fresh terrorist attacks could keep the buying interest in the low key”, some brokers fear.

“There is still panic all around after the opening, as everyone hastened to get out of the market after liquidating long positions even at throw away prices”, stock analysts at the WE Financials commenting on the post-bomb blast market said adding, “the future sailing is fraught with high risks atleast as far as the foreign buying is concerned”.

The psychological jolt came in the backdrop of pre-budget bullish predictions and how the market will react now is difficult to predict as the killing of foreigners could have far-reaching negative impact on the future outlook, fears a leading business stock analyst at the Moosani Securities.

During the initial three days, the index has fallen by 113 points or 6.5 per cent, sending signals that all may not be well with the investor-perception about the law and order situation and the future market outlook in coming weeks.

“The suicide bomb attack could cause the outflow of foreign investment rather than attracting it, as is speculated in the changing financial scenario”, stock analyst Faisal Abbas at the AHRA say, adding, “the outlook is uncertain and it is not that easy to predict how much the index would further erode its current rise of about 800 points or 45 per cent since January this year”.

The selling was so aggressive and hasty at one stage it appeared that the market will crash but the strong institutional support came to its rescue and allowed it to finish partially recovered from the early lows.

“Just at the heels of murder of a prominent Lahore-based religious scholar on Tuesday night, the local bomb blast has created uncertain law and order conditions, not conducive to foreign investment”, stock analyst Salman Ahmed at the Al-Mal Securities fear.

Share prices fell like nine pins across the board under the lead of the MNCs and the blue chips such as the PSO and the Shell Pakistan as there were more sellers than the buyers.

Most of the gains were fractional barring Faisal Spinning and Dawood Dawood Hercules, Janana Demalucho Textiles, and the Glaxo-Wellcome, while the Lever Brothers and Wyeth Pakistan, who had omitted the dividend last year were leading among the losers.

Other prominent losers were led by Javed Omer, Adamjee Insurance, Shafiq Textiles, National Refinery, Al-Ghazi Tractors, Siemens Pakistan, Engro Chemical, Highnoon Lab, Otsuka Pakistan and the Packages.

Trading volume rose to 768 million shares from the previous 600 million shares owing to post-bomb blast hasty liquidations from all and sundry in the absence of strong demand.

About 60 per cent of the total turnover shared by most actives, the PTCL and the Hub-Power, which turned in massive activities during the couple of sessions amid alternate bouts of buying and selling.

Other actives were led by the PSO, the ICI Pakistan, the FFC-Jordan Fertiliser — on the reports of a big financial bailout package —, the KESC after the reports that the banks have repaid its debts, and the Sui Northern and the National Bank.

Adamjee Insurance, Dewan Salman, the Bank of Punjab, Ibrahim Fibre, the MCB and some others were also actively traded amid alternate bouts of buying and selling.

FORWARD COUNTER: Speculative issues on the forward counter also followed the lead of their counterparts in the ready section. Barring the ICI Pakistan, the PSO and the Hub-Power, which received massive battering on the persistent selling, all others ended modestly lower.—Muhammad Aslam.