KARACHI, Oct 30: Stocks on Tuesday took a massive plunge of 2.5 per cent on panic selling ahead of Supreme Court ruling possibly on Thursday on the petitions challenging the eligibility of the president to seek reelection for the second term.

The market’s violent reaction to possible ruling was evident in the KSE 100-share index which crashed by 366 points and wiped out Rs106 billion from the market capital in the backdrop of renewed wave of political uncertainty, notably the apex court’s ruling, political polarisation and negative news from Swat.

It appeared to be a belated investor reaction to the apex court proceedings on the petitions and most of the leading investors tried to shed an extra weight before the verdict is announced.

Some others said the central bank warning about the future inflationary pressures and the widening current account deficit despite the fact that the country was achieving economic growth of over seven per cent had negative impact on the share business.

The KSE 100-share index collapsed by 365.68 points at 14,027.80 as compared to 14,393.48 a day earlier as all the leading base shares came in for active profit-selling under the lead of banking and cement shares. Its junior partner the 30-share index fell by 436.33 points at 16,788.84.

Some of the leading foreign investors in early trading tried to reverse the trend after having made fresh covering purchases in the leading oil shares, but after the mid-session they offloaded their positions in OGDC and Pakistan Petroleum which intensified the plunge.

But what seems to have worried investors and institutional traders was the expected Supreme Court ruling on Thursday over the eligibility of president to seek reelection for the second terms, said Hasnain Asghar Ali.But Faisal Abbas thinks the snap sell-off was psychological rather than real as the market has the capacity and will to rebound after the verdict on the strength of corporate earnings.

“But in case the apex court give negative ruling there could be more pruning,” he said, adding “the strong holding capacity of the big ones however may not allow any major shakeout at this stage”.

Bata Pakistan and Wyeth Pakistan were leading among the gainers, up by Rs24.90 and Rs88, followed by Clover Pakistan, Mitchell’s Fruits, Nestle Pakistan, HinoPak Motors, Sanofi-Aventis, BOC, Lakson Tobacco, which tended higher by Rs7.80 to Rs20.95.

Oil, insurance and banking sectors led the market decline followed by Siemens Pakistan and Unilever were prominent among the losers, off Rs24 and Rs26.

Other prominent losers included Arif Habib, Habib Bank, National Bank, United Bank, Pakistan Tobacco, EFU General, Pakistan Resource Co, PSO, Attock Petroleum, Pakistan Oilfields, Mari Gas, Pakistan Cables, Treet Corporation and Packages, which were marked down by Rs8.25 to Rs18.20.