KARACHI: Stocks continued to bleed on Tuesday as the KSE-100 index fell 717 points (1.97 per cent) to close below the 40,000-point level.

The benchmark ended at a 13-month low of 39,617 points.

A resurgence of foreign selling was at the heart of the index decline as foreign corporate entities ditched stocks worth $20.4 million.

Overseas Pakistanis bought shares worth $1.05m. Yet net foreign selling stood at $19.13m that, together with Monday’s sell-off of $6.01m, took the two-day foreign portfolio outflow to $26m.

Local participants were all net buyers with individuals picking up stocks worth $7.39m, companies $2.25m and mutual funds $3.23m.

A senior broker said foreigners were spooked by uncertainty on the external account, which has a direct impact on the dollar. “Many foreign fund managers believe that the rupee is artificially supported and it is profitable to exit now and re-enter after a possible 7-10pc devaluation of the Pakistani currency,” he said. Several market participants subscribed to that view.

The absence of immediate triggers coupled with the end of the earnings’ season resulted in lower activity and less aggressive bids, stated Elixir Securities. The last one hour of trading, however, saw increased activity due to cherry-picking and month-end rebalancing by institutional investors.

The volume was up 41pc from the earlier day to 139m shares while the value rose 47pc to Rs9.25 billion.

Major contribution to the downside came from Habib Bank, which came down 2.83pc, Lucky Cement 4.59pc, Engro Corporation 2.29pc, MCB Bank 2.32pc and Sui Northern Gas Pipe­lines 4.53pc, taking away 238 points from the index.

Pakistan Tobacco gained 4.92pc, Mari Petroleum 2.11pc and Pakistan Petroleum 0.62pc, adding 42 points to the benchmark.

Sector-wise, banks led the market decline as National Bank of Pakistan went down 2.9pc and United Bank lost 2.01pc.

Cements continued on a downward trajectory as Cherat Cement shed 5pc, Maple Leaf 2.81pc and Fauji Cement 3.17pc.

Published in Dawn, November 1st, 2017