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Index declines 188 points on selling spree

KARACHI — The recent speculative run-up on the Karachi Stock Exchange yesterday was halted as investors took profits at the highly inflated levels in a highly overbought market amid a briskly traded session but there were buyers at each dip.

The KSE 100-share index reacted by 188.17 points or 1.27 per cent at 14,599.38 as compared to 14,787.55 at the last weekend eroding Rs65.00 billion from the market capital at Rs4,447.830 billion as all the leading base shares attracted selling at the higher levels.

The free-float 30-share KSE index on the other hand suffered a bigger fall of 362.52 points at 17,632.77 points on an identical grounds. Leading oil and cement shares, notably OGDC, Pakistan Oilfields, D.G.Khan Cement,and Lucky Cement were among the prominent losers, which have larger weight in the index.

“It was a long overdue technical correction in a highly overbought market”, a leading analysts Ashraf Zakaria said “It could go for further pruning in the coming sessions as some leading bears are out to cash in on the available margin of profits”.

But some others said it was the belated reaction to the city carnage,which in turn added to the prevailing uncertainty and fears of law and order situation and the market may not fall before hitting index level of 15,000 points.

“There could be two opinions about the polarisation of the society but one thing is clear in the developing scenario speculative traders and vested interest may not put money into the share business as they had been doing for the last three consecutive weeks”, analyst Ahsan Mehanti fear.

However,there was no indication of panic selling as was reflected by clipping of mostly extreme gains, while on the other hand some leading maintained their upward drive and did not follow the market's general line of action.Broader market on the other hand performed credibly well as the selling was directed against the leading base shares.

Leading gainers were led by JS & Co and Siemens Pakistan,up by Rs26.90 and 61.00,while Grays of Cambridge and Unilever were prpminent among the losers,off by Rs12.80 and 48.00 respectively.