Law and order situation further squeezes market (09072008)

LEADER REPORT
KARACHI: The market opened with a bearish tone and approached its lower band, however, at the end some recovery was witnessed with the support of the power sector. While the index closed maintaining the bearish tone down by 64 points at 11,813 points.
The recent law and order situation in the city and the continued depreciation in rupee, as the dollar hit an all time high against rupee of Rs73. The depreciation increases the chances of higher discount rate. Comparing with the previous trading sessions market activity was better, volumes stood at 21 million shares. The foreign investment outflow takes a break and a net buy of USD 1 million was seen in foreign investors portfolio investment in the last trading session.
All sectors followed the bearish trend and majority of the scrips closed hitting their lower circuits. High volumes were seen in FCCL, SSGC and NBP of 5, 3 and 2 million shares, respectively, while closed hitting their lower circuit.
Slightly better activity was witnessed in the power sector due to the hike in energy prices and expected to further increase. KAPCO was the highest gainer which contributed to the index for the slight recovery before the closing.
Major scrips of the cement and banking sectors closed trading in the lower band, as both the sectors have a major impact of the tightening of monetary policy. Heavy selling was also witnessed in the telecom sector as almost all scrips closed hitting their lower lock.
The previous inactive performance is expected to continue until the law and order situation in the country gets under control, the selling pressure is absorbed by some support and investors are provided with exit mechanism. There are some chances of buying seen, due to the attractive valuations. It is possible that institutions may accumulate at this attractive level. Investors are recommended to adopt wait and see strategy till the end of the bearish spell, while they can take fundamentally backed positions with a cautious stance.