KARACHI: The stock market was hammered with heavy losses on Tuesday as the KSE-100 index took a steep fall of 1,678.89 points or 3.60 per cent to 44,914.45.

“The index has dropped below 45,000 after 135 trading sessions over a span of nearly seven months,” said one dealer.

Looking at the carnage right from the start, investors rushed in to sell before stocks hit their lower locks. It was the fifth straight day of steep decline.

The market has witnessed a staggering loss of 15.97pc since hitting its intraday all-time high of 53,124 points on May 25. Some market gurus tried to calm investors by spreading the word that it was merely a ‘correction’ and not a crash, but panic was clearly in the air.

Reasons for the steep decline include the erosion in volumes because of the Ramazan factor, around Rs20bn currently stuck in a right shares issue, possible redemptions by mutual funds to save their capital-protected funds, uncertainty about the political situation and incessant selling by foreigners.

Brokerages, mutual funds and high net worth individuals that had made anticipatory buying before Pakistan’s recent re-entry into the MSCI Emerging Market Index were caught on the wrong foot. Emerging-market foreign funds did not buy while foreign investors in the frontier market continued their sell-off.

The extent of damage to portfolios can be assessed by the quantum of losses in six MSCI names, down 18-28pc since May 25, against the KSE-100 index that shed 15.5pc, according to a report by Intermarket Securities.

Topline Securities marked top10 losers as Habib Bank, which went down 4.9pc, Oil and Gas Development Company 4.8pc, MCB Bank 5pc, Engro Corp 4pc, Lucky Cement 3.5pc, Pakistan Petroleum 4.6pc, Fauji Fertiliser 5pc, D.G. Khan Cement 4.3pc, Pakistan Oilfields 4.2pc and United Bank 1.9pc, which cumulatively eroded 742 points from the index.

Published in Dawn, June 21st, 2017