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RECORDER REPORT

KARACHI: Bears were in the driving seat on Tuesday and the market suffered substantial losses as selling pressure reached alarming levels on the report that the US might put Pakistan on a list of states that support terrorism .

The opening of the stock market was quite strong and everybody believed that index might recoup its losses. However, the copies of the New York Times report circulated in the market like hand bills. It badly impaired the confidence of the investors and unleashed selling across the board.

"The market men received this report through faxes and e-mail which unnerved the investors and the index suffered a fall of 120 points," said a leading dealer.

The newspaper report quoted an unnamed official in Washington as saying that, "the USA believes that a terrorist group supported by the Pakistani military was responsible for the hijacking of an Indian Airlines jet last month. The judgment Pakistan at risk of being placed on Washington's list of nations that support terrorism."

The KSE 100 index recorded a decline of 120.76 points and closed at 1665.10 from 1785.86 of Monday. The volume amounted to 378.242 million shares as against 407.598 million shares of Monday. The market capitalization declined to Rs 425.644 billion from Rs 452.699 billion of yesterday.

Faisal Abbas of AHR Securities said that although the market men were considering Monday's technical correction enough, it was not full and final. After gaining some points in the early session, the index went down sharply and the market witnessed a long bearish spell.

He added that a report regarding declaration of Pakistan as a terrorist country depressed the sentiment badly and the bears dominated the scenario.

The bearish spell indicated that a large number of weak holders were present in the rings who indeed were in panic and selling at any available prices, which was also one of the major reason for Tuesday's downslide. Some institutional support was, however, witnessed in the market, and some institutions seemed inclined to take positions on the on-going lucrative price levels.

The market saw heavy slides after every passing moment as bears were in commanding position. They had reason to hit back as the equities since the beginning of the new year have risen over 32 percent and bulls had halted every attempt of bears to re-enter the market. The clashes on the border in Kashmir and now the New York Times report gave the bears the opportunity they were waiting for.

These developments were enough to drag the index into the minus zone. Though there was no clarification from the Pakistan or the US side, the index on Wednesday might see another decline. However, if morning papers highlight some positive report on this matter, according to an analyst, the market might see some renew buying from the leading brokerage houses and financial institutions.

PTCL on a business of 180.885 million shares moved to Rs 27.95 from Rs 30.75, Hubco on a trading of 89.355 million shares lost Rs 2.80 to Rs 25.50, ICI on a volume of 26.497 million shares closed at Rs 12.25, lower by Rs. 1.30, PSO on a turnover of 18.070 million shares closed at Rs 237.25, lower by Rs. 7.25 and Fauji slipped to Rs 59.25 from Rs 63.90 as nearly 13.572 million shares.