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RECORDER REPORT

KARACHI: Stock values nose dived on Monday after a 12 sessions continuous rise and heavy casualties were recorded at the bourse as fresh clashes between Pakistani and Indian soldiers on Kashmir border unnerved the investors who offloaded their holding in panic.

The KSE 100 index recorded a decline of 66.60 points and closed at 1785.86 from 1852.46 of Friday. The volume amounted to 407.598 million shares as against 412.397 million shares of Friday. The market capitalisation came down to Rs 452.699 billion from Rs 467.75 billion of Friday.

Bears dominated the proceedings and booted out the bulls. The investors rushed in panic to offload their holdings seeing that in last couple of days tension at Kashmir borders had increased substantially.

The index at the close of first half of the session had seen a fall of 18 points only but in the second session, it was under tremendous selling pressure and the market in the process lost 85 points. The rumour that an Indian or Pakistani aircraft has been shot down near the line of control, alarmed the investors.

However, this rumour proved false and the index slowly recovered some of its losses but closed with a decline of 66 points.

Salman Ahmad of Finex Securities said that the downward correction was due as the market in the last couple of sessions had appreciated tremendously. The clashes at the border perturbed the investors and the index received a heavy battering.

He added that sentiment was still strong and the index might see some gains next month as a mission of IMF was arriving while negotiations between the government and Hubco were also expected to be held in a week's period.

Mohammad Zubair Ellahi of KAB Securities said that the market needed continuous liquidity injection for sustainability of inflated levels and once this stopped, slide would set in. This along with unfavourable macro environment developments had changed the market sentiment.

He said that the decline was across the board, but more intensified in high weightage stocks. The old outstanding badla positions were still in, and if the current trend persists, the pressure might intensify further. The long term outlook might still appear positive but changing outside the market factors would not justify carrying of long positions. It was advisable to reduce the exposure on intra-day rises.

Faisal Abbas of AHR Securities said that the on-going trouble on the line of control was the main reason behind the bearish trend. Profit taking by the weak holders did not allow the index to remain in the plus zone any more and hence the index started to go down and remained bearish for the entire session.

He pointed out that the index was down by more than 85 points when a sharp surge in the prices of PSO was witnessed and the scrip not only regained its previous price level but also registered a fresh gain of Re. 1 which helped the index to score around 20 points.

Although the index was down by 67 points, the active issues like PTCL and Hubco were down only marginally, while Engro, PSO and ICI, registered gains.

PTCL on a business of 124.383 million shares moved to Rs 30.75 from Rs 32.30, Hubco on a trading of 120.144 million shares lost 35 paisa to Rs 28.30, ICI on a volume of 54.394 million shares closed at Rs 13.55, higher by five paisa, PSO on a turnover of 26.319 million shares closed at Rs 245, higher by Re. 1 and Sui Northern Gas dropped by Rs 2.30 to Rs 20.60 as 18.161 million shares changed hands.