Pakistani Stocks Defy Gravity

As growing concerns about the state of the US economy took their toll on share prices in Asia, the Karachi stock market continued its rally and KSE-100 touched a new peak of 15,085.18 points level during last week ending on March 8, 2008.

"The signs of formation of coalition government of PPP, PML (N) and ANP have revived investors' confidence and they have once again started investment in the share market, which pushed the index to new high level," analysts said, according to The Business Recorder, Pakistan's Financial Daily.
The KSE-30 index went up by 239.90 points, to close at 18,607.19 points level from 18,367.29 points.

Market capitalization jumped to a new peak of Rs 4.661 trillion from Rs 4.618 trillion, an increase of Rs 42.465 billion. Average daily trading volume of ready market stood at 285 million shares, while overall some 1.294 billion shares were traded during the week.

On Friday, the Indian market closed in the deep negative territory with the BSE Sensex closing below the psychological level of 16000 and the NSE Nifty settled below the 4800 mark. The market tumbled since the initial bell tracking the news from the global markets and remained in the negative territory throughout the trading session. Also, the rising of inflation to 5.02% in February 2008 added to the negative sentiments in the market. The inflation grew to nine months high due to rise in prices of fruits, vegetables and oil seeds. The BSE Sensex closed lower by 566.56 points at 15,975.52 and NSE Nifty fell by 149.80 points to close at 4,771.60. We expect that the market may remain volatile during the trading session.

The markets in Tokyo, Taipei and Shanghai did not fare any better. The Nikkei and other indexes in Asia were in negative territory. The stock market in Shanghai fell by 3.59% to a seven month low on continued inflation worries.
Taiwan's benchmark Taiex index fell 2.7%, which was its biggest fall for six weeks.

In spite of the KSE-100 defying gravity seen in the rest of Asia and the world, there is still a big cloud hanging over the market with the expected transfer of power in the next few weeks. Any hint of serious confrontation between the new government and President Musharraf could easily erase all the stock market gains and pull the KSE-100 into deep negative territory.
Riaz Haq, www.riazhaq.com
Posted by Riaz Haq at 11:16 AM 0 comments