Selling by financial institutions and general investors erupted in the first session of the new week after significant increase in heavy badla rates, reducing share index by 85 points.
The KSE-100 index denoted a decline of 85.21 points, or 1.79 percent, to 4677.16 as compared with 4762.37 of Friday. The business amounted to 299 million shares as against 472 million shares.
The market capitalisation in the process lost Rs 25 billion to Rs 1.220 trillion.
Tariq Hussain Khan, manager research of Live Securities, said that the market, influenced by rumours regarding prolonged COT period on account of Eid holidays, resulted in a steep decline as small investors started offloading their short-term positions.
Consequently, the market dropped significantly and was not able to sustain above 4700 level. PSO and Pakistan Oilfields remained weak as investors offloaded their positions.
Among major stocks, PTCL showed some resistance and tried to halt selling pressure during the day but failed to stop the sellers' flood at the market. COT rates were also one of the prime factors which eroded share values.
"We remain optimistic on the market's future and believe that the market has potential to recover from the intense selling pressure."
Aadil Ehtesham of Multiline Securities said that bears dominated the session because profit-taking emerged in influential sectors like oil, gas, telecom, cement, automobile, refinery, textile, fertiliser and banking.
Plagued by high degree of volatility, sellers continued to offload their positions because of overbought condition and forthcoming Eid-ul-Azha holidays which scrubbed down market's earlier gains.
Any recovery attempt during the day was hampered by the rising activity, which gave way to broad-based selling pressure.
Significant selling pressure in the pivotals was visible in PSO, PTCL, Hubco, Fauji, ICI, Sui Northern, Sui Southern Gas and Pakistan Oilfields.
The market was hitherto trading around its best levels of the year as KSE-100 index had set a new 52-week high in the previous week. Sellers had been content to unload some profits in the year's top performing stocks, using the index fall through a series of support levels as further reason to lighten positions.
Hasnain Asghar of Aziz Fidahusein said that the market was victimised by extended badla of seven days and holidays on account of Eid-ul-Azha and Kashmir Day.
The adjustment was well-anticipated as fresh buyers entered towards the end, thereby extending support on dips. Technically, the index is expected to find support around closing levels (4670-4677).
The improving fundamentals and upcoming bi-annual accounts commit healthy market; badla pressure however restricts trading in huge quantities while placements are still recommended in the main stocks.
D.G. Khan Cement moved down to Rs 47.90 from Rs 48.50 on a volume of 37.406 million shares; Dewan Salman lost 15 paisa to Rs 23.15 on trading of 21 million shares; Dewan Motors fell by 35 paisa to Rs 37.10 on business of 20.895 million shares; PTCL denoted a fall of 25 paisa to Rs 37.45 on total deals of 19.477 million shares; and OGDC suffered a decline of Rs 1.70 to Rs 50.95 on transaction of 17.797 million shares.
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