The much-awaited correction was witnessed on Karachi Stock Exchange on Wednesday as several scrips had entered the overbought zone, but some banks still registered upward movement on expectations of healthy results for the year ending on December 31, 2005.
The market witnessed a massive intra-day correction, with the KSE-100 index declining by 163 points to mark 9288 points intra-day low. Share values across-the-board weakened during most of the time. This decline can mainly be termed as a correction on the back of the overvalued situation of many stocks. Nonetheless, the index managed to close with a decline of 47 points only, to the 9403-point level, on the back of late recovery of 115 points.
Volumes during the day stood at 332 million shares, which were up by 7 percent over 310 million shares of Tuesday.
Tanvir Abid, head of research at Live Securities, said that the Suis were among the few scrips that closed in the green territory, with handsome gains, attributable to privatisation stories as the Privatisation Commission has invited EoIs for SNGPL sale. As such, SNGPL and SSGC posted gains at 0.7 percent and 4.7 percent, respectively. NBP and Union Bank also remained in the positive zone, gaining 1.0 percent and 2.8 percent, respectively.
Quite unexpectedly, Bosicor gained fervently to close at Rs 26.70 despite making an intra-day low at Rs 25.80.
Prominent decliners included OGDC, PTCL, FFBL, BoP, PSO, POL and PPL.
Abbas Raza, research analyst at First Capital Equities, said that sudden selling spree in blue chip stocks was not only due to technical reasons but also due to the non-member chairman issue, which might get highlighted in Thursday'' s KSE election, and any disagreements between SECP and KSE could create uncertainties. Therefore, one ought to tread very selectively and carefully with profit and stop-loss margin in mind.
Profit -taking and subsequent selling pressure dominated market activity as the KSE could not sustain its movement in the positive zone. As a result, the market touched the low level of 9287.90 points as weak holders preferred to reduce their positions at every level.
Later on, strong support was seen in heavyweights that helped the market to recover from the bottom.
Another positive development was the fact that blue chips did not reach their lower locks. DGKC saw massive selling and it went below the Rs 110 level to close at Rs 106---down Rs 4.25. NBP, PICT and the two Suis were the gainers of the day.