Prevailing political uncertainty in the country and unrest in the Middle East region invited panic selling at the share market during the week ended on February 25, 2011. As a result, the KSE-100 index lost 817.63 points, depicting 6.8 percent decline, and closed at 11,223.52 points.
Average daily trading volume at the ready counter, however, increased by 32 percent to 97.98 million shares as compared to previous week's 74.21 million shares.
Market capitalisation declined by Rs 221 billion to Rs 3.037 trillion. Foreign investors remained net sellers of shares worth $5.4 million.
On Monday, the market opened under pressure and the index declined by 76.47 points to close at 11,964.68 points with very low volume of 50.827 million shares.
On Tuesday, the market witnessed panic selling and the index plunged by massive 315.30 points to close at 11,649.38 points with 101.529 million shares.
Bearish trend continued on Wednesday and the index lost 125.96 points to close at 11,523.42 points with 100.495 million shares.
The index on Thursday recovered 15.84 points on the back of foreign investors support and closed at 11,539.26 points with 80.203 million shares.
On Friday, the market once again witnessed panic selling due to uncertainty on political front and the index declined by 315.74 points to close the week at 11,223.52 points with 156.838 million shares.
Asad Siddiqui, analyst at Invest Capital and Securities, said that pessimism among investors on the back of political, economic and global happenings was evident by the direction of KSE 100 index during the week. The market started the week under pressure and continued its downward spiral in following trading sessions owing to continuous panic selling. Such was the intensity of pressure that was felt on the back of political uncertainty and constantly worsening situation of the whole "Raymond Davis" debacle that KSE 100 index fell by 300 points intraday on more than one occasion. Panic selling did not only come from local investors, but from foreigners as well, while the whole Middle Eastern unrest appeared to go out of hand.
Rabia Tariq at JS Global Capital said that the broad based decline continued to persist during the outgoing week, as the Index shed 818 points, the biggest weekly drop since October 2009.
With the result season almost reaching towards its end, it was believed the local political rifts between PPP and the PML-N along with developments on the Raymond Davis case would determine the direction of the market in the coming week. Further, oil prices continue to tread upwards, crossing $100 (Arab Light) mark, raising concerns for investors regarding its impact on the economy.