Stocks suffer biggest-ever plunge of 2,534 points
Leveraged buyers led a selling spree at the Pakistan Stock Exchange on Tuesday, resulting in the biggest day-on-day decline in the benchmark of major shares. The KSE-100 index dropped 2,534 points or 4.1 per cent from the preceding session to 59,170.97 points, down 11pc from an all-time high of 66,427 points on Dec 12. Speaking to Dawn, Topline Securities Ltd CEO Mohammed Sohail said high leverage was the key reason for the sharp drop in share prices on Tuesday. “Greedy investors descend upon the market every time stock prices go up too quickly,” he said while referring to leveraged traders who use borrowed funds to buy shares. They liquidate their positions in large numbers once the market enters a correction — signalled by a drop of 5-20pc in average share prices — as they’re required to deposit additional cash with their brokers to cover possible losses.