KARACHI - Karachi Stock Market could not sustain the sharp recovery seen a day earlier and KSE-100 index on Thursday fell 269 points amid regulatory changes in the margins of Oil Marketing Companies (OMCs) and cut down of refineries deemed duty. Market opened on positive note but the cap on OMCs margins invited selling pressure across the board, which brought the market in the red zone. The KSE-100 index made a high of 10,936, then dipped down to 10,533 and closed up at 10,583 points. The free float KSE-30 dived by 403 points and wrapped up at 12,001 points. Trade activity remained weak as total volume stood at 115 million shares, reflecting a decline of 2 million shares against the shares recorded a day earlier. The government has on Thursday announced a cap on OMC margins, 27 per cent down from current levels and a cut down of refineries' deemed duty by 250bps to 7.5 per cent, which would impact OMCs' and refineries' profitability negatively, in view of this investors opted for selling and share prices of OMCs and refineries companies have witnessed sharp plunge, analysts said. The share prices of SHELL, PSO and Attock Petroleum fell considerably by Rs19, Rs19.65 and Rs14.90 respectively in the wake of regulatory changes. "Market has over reacted to the cut in the margins of OMCs as the market was expecting steep cut in the deemed duty," brokers said. Negative sentiments are still prevailing at the stock market due to the bleak economic outlook, deteriorating law and order situation, further increased in discount rates and political uncertainty, resulted huge foreign outflow and liquidity problems have emerged, brokers added. Khurram Schehzad at InvestCap said that the impact of cut in margins on earnings of listed OMCs SHELL, PSO and APL would be 8 per cent on average basis. SHELL would be the most affected player due to HSD and Mogas share of 35 per cent and 9 per cent respectively in total GP, whereas PSO and APL would come at the second and third in the row with 30 per cent and 4 per cent, and 10 per cent and 2 per cent shares of Hogas in GP, respectively. Farhan Mehmood at JS Global said that the 25 percent reduction in deemed duty would trim down refineries earnings by 15-17 per cent. Though it's negative for refiners, however, the step could be taken as a relief for the investors for the time being as the market was expecting a steep cut of 50 per cent in the deemed duty. During last 3 months, sector market cap is already down by 35 per cent which means market was expecting a 50 per cent cut in duty i.e. from 10 per cent to 5 per cent. The overall market capitalisation declined by Rs84 billion to Rs3.301 trillion. Trading took place in 295 scrips, out of which 230 scrips closed in negative and only 53 scrips closed in positive zone, while the value of 12 scrips remained unchanged Arif Habib Securities came into view as volume leader with trading of 12.154 million shares chased by NIB bank with 8.706 million shares and National Bank with transaction of 7.541 million shares. Bank of Punjab grabbed fourth place in terms of volume with transaction of 7.410 million shares followed by Oil and Gas Development Authority OGDCL with trading of 5.458 million shares. Arif Habib Securities scrip fell by Rs7.03 and closed at Rs133.67, NIB shares ended at Rs9.88 from Rs10.75. Share value of National Bank also plunged to Rs119.74 from Rs126.04 and B.O.P closed slightly up at Rs31.63 from Rs30.13. The prices of OGDC share also closed down at Rs115.30 from Rs117.50.