Stocks plunge 498 points to hit three-year low
KARACHI: Stocks tumbled on Tuesday and extended the earlier day’s decline as the investors’ faith in the prevailing economic situation hit rock bottom, taking its toll on the market. The KSE-100 index spiralled downwards by 497.66 points (1.35 per cent) and hit nearly three-year low at 36,404.03; last seen at that level on May 31, 2016.
While the mutual funds dumped stocks worth $3 million, partly to save the capital-protected fund and partly to meet some resumption requests, the foreign investors thought “blood on the street” as the time to buy and picked up stocks valued at $4.3m. Local institutions generally remained on the sidelines but panic struck the individual investors.
The change at the head of the finance ministry raised spectre of a delay in the International Monetary Fund package, despite the assurance of smooth talks with the Fund by the incumbent adviser. Investors were spooked by the possibility of further monetary tightening, rupee devaluation and hike in gas and electricity prices along with heavy additional taxes to address the fiscal concerns ahead of the bailout and more burden that may be piled on the industries in the upcoming budget.