UPDATE 1-Pakistani stocks fall 2.5 pct on U.S. mistrust

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KARACHI, July 31 (Reuters) - Pakistan's main index ended nearly 2.5 percent lower on Thursday as dealers said there was foreign selling following reports and comments concerning America's mistrust of Pakistan's main military spy agency.

Defence Minister Ahmed Mukhtar told Pakistani local channel Geo News the United States had expressed concern that some members of the Inter-Services Intelligence (ISI) had tipped off militants before U.S. missile attacks were launched at al Qaeda or Taliban targets in Pakistani tribal lands. See [ISLn:3605]

"There was some foreign selling today due to the statements about the United States not trusting the ISI," said Shuja Rizvi, director broking operations at Capital One Equities Ltd.

Rzvi also noted pressure due to the government's decisionto cap oil marketing companies' and dealers' margins to $100 per barrel on Wednesday.

They also reduced the custom duty on diesel to 7.5 percent to 10.0 percent which dealers said put pressure on the refinery sector as this duty is part of the gross refining margings.

"The 25 percent reduction in deemed duty would trim refineries earnings by 15 to 17 percent," said a JS Global Capital Ltd analyst Farhan Mahmood in a note on Thursday.

According to official numbers, there was a net foreign outflow of $8.7 million on Wednesday.

The Karachi Stock Exchange (KSE) benchmark 100-share index .KSE fell 2.48 percent, or 269.44 points, to 10,583.58 on turnover of 92.8 million shares.

The free-float KSE-30 share index .KSE30 shed 3.25 percent to 12,001.67 points.

Among the most active companies, volume leader Arif Habib Securities (ARIF.KA) fell 5 percent to 133.67 rupees, National Bank of Pakistan (NBPK.KA) fell 5 percent at 119.74 rupees, while Oil and Gas Development Co Ltd (OGDC.KA) ended 2 percent lower at 115.30 rupees. (Reporting by Sahar Ahmed; editing by Simon Cameron-Moore)