KARACHI – After an exceptional sprint by the local bourse in the preceding week, adding 761 points, the index consolidated at 12,000 points. Lower average daily volume of 88 million compared to 146 million in the preceding week depicts the cautious investor behavior. Investors still await leverage products including MTS and MFS, out of which MTS is expected to be operational from Monday March 14, 2011. The bullish rally in the preceding week was spurred by local investors, while net foreign participation was around $2.92 million. The current week saw massive stocks selling from foreign investors. Selling of $7.3 million was recorded on Thursday, changing the market sentiment.
The devastating earthquake in Japan, on Friday, impacted global markets including commodity markets. Japan, the world’s third largest economy, may impact overall global economic conditions. Political warfare sustained the limelight as PPP and its turbulent relationship with MQM kept the political environment hot. Visit of IMF mission to Pakistan may decide faith of the government to introduce reforms, recommended by IMF, or any additional tax measures to reduce a shortfall in tax revenue. Slight adjustment in petroleum prices from beginning of March, expected withdrawal of GST relaxation on sugar, flood surcharge and monthly increase in power cost of two percent are most likely measures – adopted by the current regime. The benchmark index underwent consolidation on Monday, while a furious bull griped the investors mind set on Wednesday.
Investors, later, preferred to retreat from the stock market on news of foreign portfolio investment outflow and earthquake on Friday. A closer look at individual stocks reveals that FFC moved against the wind after X-bonus and X-dividend, whereas rest of the top tier stocks depicted mix trend. With leverage financing available in most of the top tier and few second tier stocks, availability of leverage financing buying power of speculative investors may increase, said Bilal Asif at HMFS. Investors’ behavior, in the upcoming week, would be based on the implementation of MTS, impact of Japan on global market and local political arena, he added.
