KARACHI: The stock market extended the declining trend on Monday as the KSE-100 index sank below the 46,000-level to close at 45,682.24, representing a loss of 389.62 points (0.85 per cent).

The market started sideways and managed to move up by 24 points before selling erupted across the board in the lead of oil and gas exploration and production (E&P) sector which was down 2pc.

The main reason that triggered the sell-off was the market talk of a big block on offer in the the heavyweight Oil and Gas Development Company (OGDC) by an identified foreign holder at a discount. About 35 million shares were offered at Rs164-168 and market talk suggested the completion of the block deal at a discount of 2pc to the Monday’s closing price.

Figures released by the National Clearing Company Ltd in the evening reflected the OGDC sale in the foreigners’ net sales figure, worth a substantial $39.5m. Although local participants absorbed this foreign sell-off with mutual funds mopping up shares of $14.92m, the OGDC stock fell to close near its “lower lock.” Moreover, increasing noise on the political front exacerbated the pressure on the market.

E&P sector dragged the index down by 135 points while cement stocks also plunged, with the sector taking away 71 points.

Overall, activity in the wider market remained depressed as institutional investors remained sidelined with market volume down 24pc over the previous session to 145m shares.

According to Topline Securities, major losers were OGDC, down 4.8pc, Fauji Fertiliser 3.6pc, Lucky Cement 1.5pc, Pakistan Petroleum 1.1pc and Pakistan State Oil 2.1pc, which together wiped off 237points from the index. On the other hand, Engro Corporation, up 1.1pc, Colgate-Palmolive Pakistan 4.6pc, Mari Petroleum 1.2pc, Indus Motor 1pc and Shifa International Hospitals 2.2pc added 51 points.

Published in Dawn, April 17th, 2018