KSE up but too shy to cross the floor

Looking at KSEs movement last week reminds one of George Soross famous quips: I contend that financial markets always present a distorted picture of reality.
Weeks of pricing-in the randomly occurring blasts that tend to target security installations more often than usual, seems to have immunized investors against all sorts of negativity. In the words of Mario Puzo, the famed writer of The Godfather, investors have made their bones, considering they just ignored the invalidation of NRO that created fears of political infighting, leadership vacuum and also a military coup - a rumor that was subsequently termed baseless by official quarters.
Investors have also seemed to discount that the much-awaited foreign inflows haven arrived as yet, implying the government would likely miss its fiscal targets for the second quarter as well, while shoving out private borrowers from the credit market.
Another distortion of reality is that the talks of economic recovery are based on agricultural growth - a sector that has small and mostly indirect representation in the listed sectors at KSE, by virtue of its little weight in bank loans and insurance, insignificant share in the energy consumption pie and employs a population that is mostly outside the tax ambit.
Yet, knowing these risks and that of inflation earlier cited by the central bank, the market rose 264 points last week, with post NRO fall out of just 70 points. Average trading volume also rose to 114 million shares, almost double from 66 million in the week before.
One move it failed to make, however, was to sustain itself above its 50-day moving average of 9238 points - a level that technical chartists say is critical to support any upside move. That and declining interest in blue chips, evident from sliding KSE-30 volumes, and the weakening of broader market as a whole show lack of conviction on part of the bulls.
Perhaps thats why foreign investors have ploughed out $6.3 million in the month to date - while domestic individuals sold about $12.6 million worth of equities in the regular market. Investors might have made their bones but they still appear brittle to march above last years floor level.