Index recovers 140 points in see-saw trading (22072008)

LEADER REPORT
KARACHI: Market witnessed a slight recovery on Monday after a spate of losses. Stock market opened with a mixed sentiment and showed a decline as the index stroked an intra day low 177 points, but at the end, it observed a bullish activity, as the major blue chip scrips closed hitting their upper circuits with exceptions. The pressure in some blue chip scrips restricted the index to post high gains as the index closed with appreciation of 140 points at 10,374 points.
The instable Rupee continued to show its depreciation. The figure from NCCPL showed a considerable amount of foreign outflow of foreign investors portfolio investment of USD 6.5 million in the last trading session. In the FY08, decline of 38% was witnessed in foreign portfolio investment and a negligible raise of 0.3% in foreign direct investment. The weak foreign investors confidence in the country is a serious matter.
The requirement of World Bank and Asian Development Bank to finish subsidies on energy and petroleum products, etc., is likely to be implemented, as a massive increase in local petroleum prices was announced. The hike in petroleum prices decreases the chance of further increase in discount rate, as it will negatively boost the cost of living and cost of doing business.
The fundamental power of market, E&P sector remained in the lime light, on the back of the positive expectations of the financial results of FY08, as the all three actives closed hitting their upper circuit. OMC's was also under the investors interest due the rise in profitability by the increase in petroleum prices.
Telecom the heavy weight of the sector and the market moved in the positive direction, as it presented a very attractive valuation. Fertilizer sector did not perform as expected. The extremely discounted sector, the banking sector, performed with a bullish tone.
The market's performance is encouraging the return of improved trading activity and volumes. The bourse are presented at a very attractive valuation, as it witnessed on Monday participation of institutions. It is possible that institution will avail the opportunity and accumulate at this level. The market support fund is finally expected to enter the market by next week, which will provide a firm support for recovery. The interest of economic managers as the Governor SBP and the finance minister visits to KSE is a positive sign for the markets recovery. Investors are advised to invest in fundamentally strong sectors.