Market continues to suffer losses; index sheds 285 points (28082008)

LEADER REPORT
KARACHI: Market continued to remain in the depressive mode as investors continued to offload their portfolios as sectors lost weights across the board. With instability prevailing over the political setup, investors' sentiments remain shattered.
In addition, the continuous outflow of foreign investment has further dampened the market performance and shaken the already deteriorated market confidence. Index on Wednesday saw yet another low as it breached an intraday low of 8,999 before witnessing a minor recovery to close above 9,000 support level.
The KSE-100 Index lost considerable weights as index closed at 9,144 points while shedding 285 points. Volumes also remained depressive at 94mn shares, while advance to decline ratio once again favored the bulls, as 200 scrips lost values while only 70 companies made gains.
Banking and E&P sectors yet again remained at the downside, as investors opted to shrink their portfolios. Banks lead the downfall as all blue-chip scrips lost weights intraday including, MCB and HBL that lost Rs12.53 and Rs6.55, respectively.
The sector in short term has remained a victim of panic selling, due to the prevailing situation of split between two coalition partners. Also, tightening monetary policy has hampered the sector liquidity causing lending capacity of various banks thus restricting their earning potential.
In long term perspective, however, stability is expected as the earning results of major banks have shown improvement while the scrips traded at discounts.
E&P sector also remained depressed, backed by ongoing political disharmony. Investors opted to shed their portfolios primarily by selling pressure witnessed in actives of OGDC, PPL and POL all remained in the red zone. The sector previously has witnessed better performance, therefore, the sector is expected to bounce back in longer term owing to the earnings potentials of these companies as demand for oil products remains vital.
Moving ahead, investors are advised to stay sidelined in short term. With deteriorating market situation, KSE member called a meeting to discuss issues, while considering recommendation of freezing the index at Wednesday's closing levels.
Better performance of the market is anticipated if some support is provided by the government institutions, though it could only provide temporary support to the market.