Index loses 436 points

The prevailing political situation in the country and the state of Pak-US relations led to panic selling at Karachi share market during the week ended on December 16, 2011 and the KSE-100 index declined by 436.47 points to close at 11,028.14 points.
The index at one point in the week broke the crucial 11,000 points level and hit 10,894.13 points intra-day low level but managed to close above 11,000 points on the back of government institutions' support.
The average daily trading volume increased slightly, by 1.3 percent, to 44.30 million shares as compared to previous week's 43.71 million shares.
Market capitalisation declined by Rs 120 billion to Rs 2.862 trillion.
Foreign investors remained on the selling side and withdrew $11 million from the equity market as compared to an outflow of $4.8 million of previous week.
On Monday, the market opened on a positive note and the index gained 12.51 points to close at 11,477.12 points with the volume of 45.753 million shares.
On Tuesday, the market witnessed bearish trend and the index declined by 199.10 points to close at 11,278.02 points with 41.084 million shares.
On Wednesday, the index recovered 22.97 points and closed at 11,300.99 with 34.960 million shares.
On Thursday, the market witnessed panic selling and the index declined by 161.47 points to close at 11,139.52 with 52.038 million shares.
This trend continued on Friday and the index lost 111.38 points to close at 11,028.14 points with 47.641 million shares.
Yawar Uz Zaman, an analyst at InvestCap, said that due to the prevailing disappointment on political front, the KSE-100 index took a nose-dive, and broke the psychological level of 11,000 points. However, recovery was later restored and the market closed at 11,028 points, down 3.8 percent on week-on-week basis.
The gloomy relationships between Pakistan and US, and the fresh 'Memo' conspiracy were the major reasons to be blamed for such depressed activity. Market sentiment became threatened in the aftermath of US halting $700 million worth of aid to Pakistan. Meanwhile, the ongoing tension on 'Memo' issue further added fuel to the fire as the conspiracy hotted up.
Furqan Ayub at JS Global Capital said that the political temperatures rose to new heights after the validation of the controversial 'memo' by Army Chief General Kayani and ISI Chief, Ahmed Shuja Pasha in their replies to the Supreme Court. Moreover, deteriorating external indicators weakened the investor sentiment.
PPL and POL outperformed the market by 3 percent and 1 percent respectively, on expectations of production enhancements. Conversely, uncertainty on gas related issues resulted in Engro and FFBL to under-perform the market by 10 percent and 11 percent, respectively.