KARACHI: Stocks stood badly battered on Tuesday with the KSE-100 index falling by a steep 489.53 points, or 1.54 per cent, at 31,310.73. Volumes declined 10pc to 128m shares (value down 4pc to Rs8.7 billion) compared to month-to-date average of 150m shares of the value of Rs9bn.
The market was taken by surprise as the benchmark index turned southward on Tuesday, though most investors expected extension in the Friday’s recovery.
The expectations and subsequent announcement of cut in policy rate by the SBP by 50bps was thought to have fuelled the Friday rally, which encouraged market to believe that the foreign selling spree had ended and the market would exit its downward trajectory. That was not to be.
On Tuesday net sale by foreign investors’ stood at $7.28 million.
The year-to-date foreign portfolio outflow amounted to $123.82m. “Aggressive sell-off by foreigners mainly in index heavyweight stocks had forced local investors also to offload in desperation,” said a stockbroker.
Other heavyweights such as ENGRO, POL and LUCK fell by 4pc, 4pc and 2pc, respectively.He referred to the heavyweight MCB Bank which fell for a consecutive fifth session on Tuesday, trimming 14pc off the value since March 17, 2015, hitting its lower circuit.
Market talks mention overseas ‘Everest’ Fund which was leading the foreigners’ sale. “One of its seven funds — a money market fund — had lost considerable sum, which spooked investors in other funds, resulting in all-round selling,” explained a local fund manager.
Zulqarnain Khan, Executive Director at Next Capital, said that investors’ interest was intact in good-dividend yielding growth stocks.