KARACHI The Karachi stock market tumbled 2.6 per cent to more than a two month low on Tuesday, on panic selling by the foreign investors after global capital markets plunged on political unrest in Libya and anti-government demonstrations across the Middle East. The Karachi Stock Exchanges benchmark 100-share index lost 315.30 points to close at 11649.38, its lowest closing since Dec. 13. Turnover rose to 101.46 million shares, compared with 61.15 million shares traded on Monday. Market experts pointed to nervousness and said market is likely to face selling pressure in the coming days. There is foreign selling because of the situation in North Africa and the Middle East. Analyst Ahsan Mehanti said that rising political uncertainty, as the governments alliance with the PML-N is near its end, affected the market sentiment. Investors remained cautious throughout the trading session on concerns over rising circular debt in the energy sector and political reservations over rising local POL prices. Hasnain Asghar Ali at Aziz Fidahusein said prolonged stagnation amid gloomy horizon forced the larva in the making, to start emitting fumes. Absence of buyers on intervals did add colour of panic, thus, forcing the index to wipe off substantial values right from the early hours. The local financial groups trading from both local and offshore accounts, along with local groups, stayed the major sellers. Joining the sell-off were the local high net worth participants along with the resident participants. Panic triggered upon the whispers of selling by the foreign fund managers, mainly due to prolonged stagnation, shallowness, and awkward economic, financial and international fronts disallowed even the local corporate participants from making fresh placements. Since high priced stocks are still closely held by the syndicate of local business groups active from both local and off-shore accounts the recent decline can not therefore be termed a free-fall. In case the situation on various sensitive fronts persists chances of free fall are still on the higher side, since various main board stocks are still trading a higher multiples, and have so far failed to invite buyers on intervals. Low volume price erosion might be a common feature in upcoming sessions. However, stocks offering consistent dividend yields did attract equities specific funds from both retail and corporate fronts, while others without binding opted for foreign currency hedge, thereby, relatively increasing the rate of return, wherein only few listed companies qualify, thus making cherry picking extremely cautious. While the high priced stocks despite increasing chances of technical recovery, that duly increases with adjustment in share price, had sellers cued-up at prevailing levels, along with highly leveraged and those highly dependent on economic development failed to invite buyers even at substantial discounts, thereby keeping a cautious stance intact.