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STOCKS

RECORDER REPORT

KARACHI: Bears dominated the proceedings at the Karachi Stock Exchange on Friday nearly every blue chip and investment stock shed weight on profit selling in line with theory of seasoned traders and brokers "buy on rumours and sell on news".

The market recorded a hefty decline under the lead of pivotals and volume also depicted a slide which showed that genuine investors were out of the ring. The activity of weak holders and retail investors forced the index to slip. The support from financial institutions and large trading houses was lacking which did not allow the market to absorb the initial shock.

The KSE-100 index fell by 52.52 points or 2.6 percent to 2001.90 from 2054.43 from of Thursday. The volume amounted to 217.048 million shares as against 395.130 million shares of Thursday. The market capitalisation moved down to Rs 503.881 billion from Rs 516.127 billion.

Nadeem-ud-Din of AHR Securities said that the prices of almost all active issues tumbled down and the overall sentiment remained bearish from the beginning. The selling by the local institutions resulted in a panic situation and the bulls a started to off-load their outstanding, especially, in the second session. Indeed, the selling pressure was so severe and the absorption so niggardly that the prices went down sharply and the bears availed of the opportunity.

The main reason behind the landslide was the deceptive overbought positions, which was seen in later session in the form of heavy selling by the weakholders. In addition, this decline was mainly based on one psychological theory that is "buy on rumors sell on news". The buying spree was apparently on the basis of upcoming Clinton's visit to Pakistan, which had already been digested.

Henceforth, low of carry over transaction are indicating fresh incoming funds by local institutions, which might result in a sustainable buying rally in the forthcoming sessions.

An analyst from Westminster and Eastern Services Limited said that the index opened on a weak note and witnessed sidewise movements in the first hour session. The bears, however, triggered the selling pressure just before closing of the first session, which further intensified in the later session to close the week on a depressed note.

"This erosion was expected as the market lacked genuine support in the market and would witness slipover before Clinton's visit", he said.

The weak closing of index indicated that market had diluted its overbought position to some extent and requires consolidation on these levels. He believed that market might further dilute its values on the coming session, however, news arose

1 from Clinton's visit might support the index on prevailing levels.

PTCL on a trading of 70.057 million shares showed a fall of Rs 1.15 to Rs 33.50, Hub Power moved down to Rs 28.40 from Rs 29.15 as nearly 38.362 million shares changed hands, ICI on a trading of 22.973 million shares closed at Rs 17.50, i.e. lower by 55 paisa, Sui Northern Gas on a volume of 10.726 million shares recorded a drop of 90 paisa to Rs 23.05 and PSO on a turnover of 10.075 million shares moved down by Rs 7.95 to Rs 246.00.