KARACHI: The stock market posted its biggest-ever decline in terms of points on Monday after news that Prime Minister Nawaz Sharif will appear before the joint investigation team on the Panama Papers case.

The benchmark KSE-100 index plummeted 1,855 points, or 3.75 per cent, to close at 47,672 points. In terms of percentage, it was the index’s biggest fall in nearly two years.

The bloodbath on Monday not only saw Rs320 billion hacked off the value of the Pakistan Stock Exchange (PSX), but it also wiped off the entire gains of 1,720 points (3.60pc) collected by the market since Jan 1 this year.

The market opened on a sombre note and as the day progressed, investors, both individual and several institutions, rushed to liquidate their positions.

While the deafening political noise was bad enough for the sentiments, the fall in international prices of oil and the meltdown across Asian markets accelerated selling.

The index succumbed to selling pressure as investors ignored last week’s foreign buying. Investors were also peeved by the federal budget that had little to offer and piled more burdens on equity investors. The lukewarm response to the book-building process last week for the sale of 10pc shares in PSX also took its toll on the market.

A stockbroker sitting idly on the bench in the trading hall remarked: “Cricket and stock market have a thing in common: both are unpredictable.” The yesterday’s decline came exactly after one week of posting a gain of 1,566 points (3.22pc) last Monday, he reminded.

Trading volumes edged higher by 5pc over the last session to 219 million shares, but remained below the 10-day moving average of 267m shares.

Major contribution to the volume came from mid-tier stocks, including WorldCall Telecom Ltd which fell 3.70pc, Engro Polymer and Chemicals Ltd 4.44pc and Dost Steels Ltd 6.77pc. Traded value increased 13pc over the last session to Rs9.27bn.

According to Topline Securities, the 10 stocks that bled heavily included Habib Bank which was down 3.3pc, Engro Corporation 5pc, Oil and Gas Development Company (OGDC) 5pc, Lucky Cement 3.8pc, Hub Power Company 4.2pc, United Bank Ltd 3.3pc, Pakistan Petroleum Ltd 4.1pc, Pakistan Oilfields Ltd 4.9pc, Pakistan State Oil 5pc and MCB Bank 3.2pc; the decline in these shares took 785 points off the index.

From the sector perspective, banks shed 373 points, the exploration and production sector 259 points, fertiliser 253 points, cement 243 points, oil marketing companies 151 points and power 122 points.

News flow regarding the discovery of gas and condensate at Chabro 01 by the OGDC failed to spur excitement. “Technically speaking, the KSE-100 index extended declines amid expanding turnover as market bears remained in charge and pushed the benchmark close to its recent low of 47,491 posted on June 2,” dealers at Intermarket Securities said. Further decline may see KSE-100 index sliding to 46,048, a level witnessed during the day on April 19 on the eve of the Panamagate verdict.

Published in Dawn, June 13th, 2017