KARACHI, Feb 26: Stocks on Wednesday suffered fresh widespread decline under the lead of overvalued shares in the energy sector and analysts fear it could well be the beginning of the KSE index’s journey below the chart point of 2,000. The index fell below the crucial level of 2,400 at 2,397.16, off 31.21 points.

The snap withdrawal of financial institutions to the sidelines has halted the market’s upward drive as the retailers collectively are not in a position to set the market trend. What appears to be more disturbing is that even expected higher corporate announcements from the mega companies failed to keep the buying interest alive on those counters.

The KSE 100-share index, therefore, breached through the crucial psychological barrier of 2,400 points, sending bearish signals and further unloading by jobbers and weakholders in the absence of strong financial support.

After early opening higher by 35 points on active short-covering in some of the pivotals under the lead of Hub-Power, leading base shares came in for active selling, pushing the index at one stage as lower as 2,370.00. But the finish was slightly better at 2,397.16 on late buying at the dips. The net fall over the day was of the order of 31.21 points or 1.29 per cent.

Analysts said the announcement of board meeting of Hub-Power on March 5, and predictions of a good interim dividend and higher cash dividend by Pakistan Oilfields should have lured investors back in the rings, the lower rates failed to provide an attractive bait for them.

“The direction of the market is unclear at this stage,” they said adding “the fears of Iraq war seems to have taken steam out of the market at least for the near-term.”

Low daily traded volumes, well below the 100-share market as compared to average turnover of about 160m, reflects the investor mood and his future perceptions about the share business.

“In normal market conditions corporate announcements generally provide a level-playing field for all, but higher interims by Pakistan Refinery, Mari Gas or an expected good interim by the Hub-Power failed to generate fresh buying on any of the counter,” says a leading broker.

I suspect investors are awaiting the fall of the index around 2,000 points and then to resume their covering operations, allowing the index to move with the range of 500 points between 2,500 and 2,000.

However, all was not bad with the broader market as some of the leading shares managed to post good gains in a lacklustre session. They were led by Clariant Pakistan, Liberty Mills, Babri Cotton, Bata Pakistan after the announcement of cash dividend of 40 per cent for the year ended Dec 31, 2002, and BOC Pakistan, up Rs1.50 to Rs6.

Losers were led by Pakistan Refinery, Siemens Pakistan, Treet Corporation, Shell Pakistan and Unilever Pakistan, off Rs5.60 to Rs20. Adamjee Insurance, IGI Insurance, New Jubilee Insurance, Gul Ahmed Textiles, Mari Gas, Crescent Steel, Honda Atlas, ICI Pakistan, Packges, National Foods and several others, off Rs2 to Rs4.20.

Trading volume showed a modest rise at 104m shares as compared to 77m shares a day earlier but losers maintained a strong lead over the gainers at 188 to 46, with 45 shares holding on to the last levels.

Hub-Power came in for active short-covering ahead of its board meeting and rose by 10 paisa at Rs34.60 on 40m shares, PSO, off Rs1.80 at Rs177.50 on 13m shares, FFC-Jordan Fertilizer, lower 85 paisa at Rs10.35 on 11m shares, PTCL, lower 15 paisa at Rs20.40 on 9m shares, Pak PTA, easy 15 paisa at Rs7 on 6m shares and Sui Northern Gas, lower 10 paisa at Rs20.80 on 3m shares.

Other actives were led by Pakistan Oilfields, up 65 paisa on 3m shares, KESC, firm five paisa on 2m shares. ICI Pakistan, off Rs2 on 1.738m shares and Japan Power, lower 15 paisa at Rs3.85 on 1.627m shares.

FORWARD COUNTER: All the leading shares, notably Engro Chemical, ICI Pakistan and PSO came in for renewed selling and suffered fall ranging from Rs1.34 to Rs2.34 for both the settlements amid modest turnover. PSO, Engro Chemical and ICI Pakistan ended at Rs177.50, Rs83.75 and Rs44.90 for the ruling contracts.