LAHORE - The Pakistan Stock Exchange fell sharply on Monday over the controversial statement by former Prime Minister Nawaz Sharif on Mumbai attacks, which led to heavy selling in the market.

Experts said that the KSE 100-share index splashed red ink everywhere in yesterday's trading session and fell to its lowest level in 88 sessions, shedding whopping 1,096 points to close at 42,499 points.

This selling pressure in the market was on the back of investors’ skepticism regarding the political scenario in the country following statements by the former Prime Minister Nawaz Sharif over security matters. Volumes remained low at 176 million shares, with KEL (-4.78 percent) from the power sector leading the volumes chart with an exchange of 12 million shares.

HBL (-3.28 percent), ENGRO (-3.97 percent), POL (-4.66 percent), LUCK (-3.10 percent) and OGDC (-2.23 percent) were among major laggards that dragged the index down by 328 points. In the banking sector, HBL (-3.28 percent), UBL (-1.93 percent) and MCB (-0.67 percent) closed lower. Cement sector too remained under the hammer as LUCK (-3.10 percent), DGKC (-5 percent), FCCL (-4.93 percent) and PIOC (-4.65 percent) lost value to close in the red trajectory. POL (-4.66 percent), OGDC (-2.23 percent) and PPL (-2.23 percent) lost value as crude oil prices edged lower from three-and-a-half-year high in the international market.

Market participants remained concerned, as they consider potential impact of this statement in upcoming FATF’s decision of Pakistan’s fate related to its inclusion in Grey/Black List. Consequently, pressure was seen in the market, as benchmark index lost 2.5 percent in a single day. Market participants in terms of volume went up by 7 percent, while value surged by 16 percent. HBL, ENGRO, POL, LUCK and OGDC cumulatively withheld 328 points from the index.

Despite OGRA’s approval to allow UFG on RLNG as a pass through, SSGC closed at its lower lock. Experts expect political scenario to continue to affect the stock market. Moving forward, they recommend investors to stay cautious and avoid short term positions.