Bears dominate KSE;index loses 217 points (16072208)

LEADER REPORT
KARACHI: Market in its opening session lurched downward, losing 265 points, but later on recovery was witnessed.
The recovery was basically on the back of the oil sector. The market strengthened its performance with improved volumes of 155 million shares, and investor's confidence was slightly recovered.
At the end, market experienced a selling pressure and the index closed after shedding 217 points at 10,960 points.
Rupee closed above 70 against USD, after slight depreciation. The measures taken by the SBP were proved successful to stabilise the rupee for short term, but for long term foreign currency inflow is required. Economic coordination committee conference (ECCC) which was in progress till filing of this report was considering the revision of petroleum prices, subsidy of DAP (fertilizer), gas prices for industries, increase in electricity prices and subsidy to the textile industry for research and development.
The deteriorating economic situation became apparent after the release of the figure of government borrowing for FY08 of Rs.1.271 trillion. On the flip side Saudi Arabia has provided with a deferred oil payment facility to Pakistan; this will provide a substantial support to the macro economic indicators of the country.
Banking sector continued its bearish activity and major scrips closed at their lower circuits. The banking scrips have been hit by the tightening of monetary policy, but the scrips are at extremely attractive valuation. Cement price increased to its all time high level of around Rs.400 per bag. The hike in cement prices is due to the soaring coal prices which contribute to the major part of the cost of production.
The markets performance is encouraging, and investors are advised to invest in fundamentally strong sectors.