KARACHI, Nov 28: Stocks on Thursday received massive battering for the second session in a row followed by renewed selling amid fears of fall of the newly formed Jamali government in the centre after the withdrawal of Muttahida Qaumi Movement (MQM) support to it and to sit on the opposition benches.
The panic was so strong that everyone tried to get out of the market even after liquidating long positions at each dip. The KSE 100-share index ended with a fresh sharp setback of 47.34 points at 2,238.14 as compared to Wednesday’s 2,285.48 as all the leading base shares fell further.
“Negative news follow in quick succession”, one broker said “just at the heels of the US threat of possible economic sanctions against its close ally for its alleged nuclear links with North Korea, came the news of MQM’s parting ways with the Jamali government and suspension of Sindh Assembly session”.
In normal conditions the market should have welcomed the MMA statement that it will not allow the winding up of the present democratic set up after extending support to the Jamali-led coalition government.
Overvalued shares, notably in the energy and chemicals sectors, which have been ruling at their career-best levels again came in for strong pruning despite sustained efforts made by the institutional traders to forestall fresh panic selling.
Technically speaking, there is no harm if the market sheds another 40 to 50 points by way of correction but beyond this, it will signal the dominant role of bears, brokers said.
It looks now that the market’s rise to the index level of around 2,400 may not be sustainable owing to developing scenario both on the local and external political fronts.
“I don’t think the recent US warning aims at destabilizing the Musharraf-led government as there is no change in Pakistan’s strategic position as a front-line country against terrorism”, says a leading analyst. “The US cannot go for sanctions at this stage for more than one reasons”.
The market, therefore, digested the negative impact of the US warning but it failed to cherish the idea of parting of ways by the MQM so soon on the pretext that official promises made to it were not honoured.
Most of the leading MNCs led the list of declining shares, notable among them being Shell Pakistan and Siemens Pakistan, off Rs10.70 and Rs11 followed by Attock Refinery, Javed Omer, IGI Insurance, National Refinery, Pakistan Refinery, Pakistan Oilfields, PSO, Al-Ghazi Tractors, Abbott Lab and Dawood Hercules, off Rs2.60 to Rs8.70.
Unilever Pakistan and Dilon managed to end with gains ranging from Rs3.50 to Rs5 followed by Pakistan Commercial Leasing, Blessed Textiles, Faisal Spinning, Dadex Eternit, Usman Textiles and Otsuka Pakistan, up Rs1.10 to Rs1.85.
Trading volume rose to 180m shares from the previous 128m shares but losers maintained a strong lead over the gainers at 183 to 61, with 43 shares holding on to the last levels.
Hub-Power led the list of actives, off 45 paisa at Rs47.90 on 48m shares, PTCL, lower 30 paisa at Rs21.85 on 35m shares, PSO, sharply lower by Rs8.70 at Rs173.25 on 16m shares, Sui Northern Gas, off 50 paisa at Rs17.35 on 10m shares, Trust Modaraba, easy 10 paisa at Rs3.30 on 9m shares, MCB, lower 30 paisa at Rs31.90 on 7m shares and National Bank, off 80 paisa at Rs24.05 on 5m shares.
Other actives were led by D.G.Khan Cement, lower 65 paisa on 5m shares, Adamjee Insurance, easy 10 paisa also on 5m shares and FFC-Jordan Fertilizer, off 40 paisa on 4.808m shares.
FORWARD COUNTER: All the leading speculative scrips came in for fresh selling in sympathy with the ready section and fell under the lead of Hub-Power, easy 50 paisa at Rs27.80 on 9m shares followed by PTCL, lower 35 paisa at Rs21.85 on 7m shares, PSO, which fell sharply by Rs8.65 at Rs173.25 on 5m shares.
ICI Pakistan also suffered sharp setback of Rs1.55 and Rs1.75 in both the ruling November and December settlements respectively at Rs44 and Rs44.45. Fauji Fertilizer, Engro Chemical also suffered sharp fall in both the settlements, while others fell modestly.
FFC-Jordan Fertilizer also came in for active selling and fell by 35 paisa at Rs7.50 on 1.036m shares followed by Engro Chemical, 55 paisa at Rs70.75 on 1m shares.
DEFAULTER COMPANIES: Suzuki Motorcycles came in for active support and rose 50 paisa at Rs8.75 on 11,500 shares followed by Pangrio Sugar, easy five paisa at Rs0.90 on 4,000 shares and Allied Motors, lower 40 paisa at Rs11.10 on 3,500 shares.
BOARD MEETINGS: Tobacco International on Dec 2, Glaxo-Wellcome Pakistan, Saadi Cement and Pakland Cement on Dec 3.