KARACHI: The stock market stood badly battered on Tuesday with the KSE-100 index sinking by 702.26 points (1.60 per cent) — representing the steepest decline in 20 sessions — to close at 43,228.90 points.

Jitters on the political front were also to blame for the sell-off, but the major factor that sent investors into panic selling was the fear that increase in costs of sales that corporates would have to bear on account of the devaluation of the rupee against the dollar would impact bottomlines.

Investors ditched shares across the board. Analysts at Topline Securities pointed out that thePakistan’s imports continue to rise as last two devaluations have yet to make any noticeable impact on the overall import bill, thereby raising the questions on the effectiveness of the entire exercise.

Investors also feared that the latest devaluation and call to further pressure on the local currency going forward would push up the interest rates and will eventually rein in aggregate demand.The biggest casualties were the cement and steel sectors.

Banks were battered by 213 points which was mainly blamed on foreign selling, although according to National Clearing Company’s figures, foreigners sold only $1.49m worth stocks. Other sectors that pulled the market down includedoil and gas marketing companies, by 70 points, fertiliser 65 points and engineering 40 points.

The traded volume plummeted by 14pc to 138 million shares while the value decreased by 23pc to $50m.Bank of Punjab, Siddiqsons Tin, Fauji Cement, Pak Elektron and K-Electric accounted for 34pc of the day’s aggregate turnover.

Heavyweight stocks that led the laggards were Habib Bank, down 3.5pc, Oil and Gas Development Company 0.7pc, Pakistan Petroleum 0.1pc, United Bank 3.5pc, Engro Corporation 0.6pc, MCB Bank 2.3pc, Lucky Cement 2.8pc, Pakistan Oilfields 1pc, Fauji Fertiliser 1.6pc, cumulatively wiping off 309 points from the index.Some of the mid-tier banks saw buying activity and were bought at dips.

Published in Dawn, June 13th, 2018