The benchmark KSE 100-share index plunged by about 1,700 points or 20 per cent during the last week eroding over Rs400 billion from the market capital as foreign investors continued to unloading their long positions after the removal of floor.

Over the last week, the index breached through the eighth consecutive barrier from the 15,000 points plus to below 8,000 at 7,514.42, since the current recession started leading to unprecedented price erosions in between.

It fell by 19.69 per cent or 1,671.72 points and lost Rs413.4 billion in market capital at Rs2,327.7bn.

‘It was a massive exit of the foreign investors trapped during the last more than three months,’ analysts said ‘the route chosen by them was off-the-market transactions leading to a galore of lower locks on the blue chips counter, notably the leading banks and oil sectors.

Apart from outstanding CFS positions totaling about Rs11 billion, investors were awaiting Sindh High Court ruling on the issue, the other destabilizing factor was a negative outlook for the leading banks by the Moody’s followed by fresh liquidations by the leading investors.

Floor brokers said investor at large seemed to have lost in the share business at least for the near-term after having eroded about $44 billion from the market capital from $75 to $31 billion since the current downward drift started on the share market and most of them may not have fresh appetite even for the blue chips available at a terribly cheaper rates.

The question being debated in the stock market circles whether or not the market will recover from the current lower levels or the market support fund of Rs20 billion could pull it out from the current impasse. The near-term answer is negative as both market trend setters and institutional traders are not inclined to take even a calculated risk until some positive developments emerge on the economic and financial front.

The law and order situation and news coming from the Fata areas in the backdrop of US drone attacks followed by large casualties is also said to be the most disturbing factor.

‘The major issue of CFS MK-II holdings of Rs11 billion is still unresolved,’ analyst Hasnain Asghar Ali said. ‘The future market direction will be guided by the court verdict on it’.

The talk of out of the-court-settlement on leveraged positions on the pattern of the removal of floor may not be relevant at this stage as the issue involves stakeholders on both sides of the divide, he said, adding a loud whispering about a consensus about rolling over of CFS positions to six months could be an acceptable formula for stakeholders.

‘The Rs11 billion at stake is a big amount,’ analyst Ahsan Mahanti observes and it may not be that easy to resolve it outside the court. The exponents could not resolve it during the last four months and how would they do so in couple of days.Bulk of the selling originate from leading foreign funds was confined to most of the blue chips including notable Unilever Pakistan, PSO, Pakistan Petroleum, MCB Bank, National Bank and Habib Bank, but prices mostly without finding any willing buyers even at the decline, they said.

The market could suffer fresh pruning next week, but the talk that the index could fall by another 25 per cent appears to be a bit speculative as some of the bulls are planning a ‘big kill’ at the current lows, they added.

But some others said the market could stabilise in the next week as the pent-up selling may have run its course paving the way for return of the bulls.

Minus signs dominated the list under the lead of blue chips in the banking and oil sector falling like house of cards without finding willing buyers even at the dips.

National Bank, Faysal Bank, MCB Bank, Adamjee Insurance, Attock, National Refinery, OGDC, Pakistan Oilfields, Pakistan Petroleum, Millat Tractors, Engro Chemical, ICI Pakistan, Packages and Unilever Pakistan were among the prominent losers.

FORWARD COUNTER: After lacklustre trading on this counter for the last four months stray activity was witnessed after the removal of the floor from under the KSE 100-share index.But all the shares fell in unison under the lead of blue chips, such as MCB Bank, Pakistan Oilfield, Pakistan Petroleum, PSO, National Refinery and many others finishing with massive losses.