KARACHI: Stocks fell like ninepins on Tuesday as investors jettisoned shares and sought the shelter of fixed-income securities. The KSE-100 index plunged 379 points, or 0.80 per cent, and closed at 46,891, again relinquishing the 47,000 psychological level.

A massive sum of Rs100bn was wiped out from the market capitalisation in a single day. The sell-off was triggered by the free fall of the rupee against the dollar, to its all-time low in the interbank market.

Investors worried over the increase in cost of imported raw materials which would give a surge to the cost of production and weaken the corporate bottom lines. Rumours also circulated in the market of US State Secretary hinting on revisiting US-Pakistan relations.

Investors thought it a bad omen just as the negotiations with IMF for the sixth tranche was to start by the end of current month. Market watchers also started to reconsider the outlook on upcoming SBP Monetary Policy given the eroding value of the rupee. Foreign selling trickled to $1.03m on Tuesday after the previous three-day sell-off in heavy sum of $13.31m. The heaviest outflow on Tuesday was seen in mutual funds amounting to $2.22m.

A fund manager said that it was due to run on redemptions by a pension fund.

The market started on a negative footing and as investors started to sell across the board, the index spiralled downwards to intraday low by 663 points. Major participants tried to calm the market, which slowed down the selling spree.

Sectors that took the brunt of the blow of a falling market included cement (96 points), E&P (45 points), technology (39 points) and O&GMCs (28 points). Refinery sector erased 52 points from the index faced as all stocks including Attock, National, Byco and Pakistan Refinery face the bearish onslaught as investors started to suspect that the Refinery Policy 2021 had failed to meet the required approvals.

Stocks that contributed positively to the index included HBL (36 points), HMB (22 points), FFC (9 points), DCR (6 points) and PKGS (5 points). Stocks that contributed negatively were Lucky Cement (44 points), TRG (24 points), OGDC (23 points), DGKC (19 points) and Byco (18 points).

Published in Dawn, September 15th, 2021