Fear of coalition split squeezes index; 289 points lost (22082008)

LEADER REPORT
KARACHI: Market remained depressed largely due to the split amongst the coalition partners after an ultimatum by Nawaz Sharif for severing the coalition if PPPP doesn't restore the judiciary by Friday.
Investors' sentiments remained on the depressing end as market saw decline during the morning session, however, some recovery was witnessed intraday to yet again seeing shrinkage with heavy selling witnessed at close due to the ultimatum.
The KSE-100 index diminished in value by 289 points to close at 10,214 levels while the volumes remained at moderate levels of 120mn shares being traded intraday. Decliners, however, gained weights over the advancers at 188 vs 93 scrips.
The E&P sector once again remained the primary pusher of the index as the sector actives OGDC, POL and PPL all lost weights by Rs5.86, Rs14.09 and Rs10.15, respectively owing to investors cautious stance as they opted to offload their portfolios on the back of prevailing political environment. Moving ahead the market is expected to witness better performance on the back of fundamentals and scrips trading at discount levels.
Banks saw yet another depressive day as almost all scrips witnessed a decline while a few second tier stocks saw some accumulations. Banks also remained the victim of prevailing sentiments of the investors as the political harmony remains questionable in short term. In long term perspective, the banking sector is expected to perform better on the back of earnings potentials of the blue-chip scrips.
Overall, the short term perspective looks bleak as political environment remains precarious while the ruling coalition seem split over judiciary restoration with the President's resignation did not smoothen the reinstatement process. In the long run, the market may see better sessions owing to its attractive levels and fundamentals remain stable and political atmosphere becomes vibrant.