KARACHI - The local investors opted profit taking on Tuesday as KSE 100-index decline by 99 points to close at 9204 points. The KSE 100-index opened in green zone with a gain of 42.56 points and at the end of the day closed at 9204.98 with a loss of 99.33 points. KSE 30-index closed at 9704.24 with a loss of 259.22 points. KMI 30-index closed at 13436.81 with a gain of 283.49 points. All shares index closed at 6526.77 with a loss of 69.14 points. Trading activity was better as compared to the last trading session as the ready market volume stands at 184.030m as compared to last trading session 196.626m. Future market volume however stands at 3.704m shares as compared to 2.964m shares last trading session. Market capitalisation stands over Rs2.658tr. Total trades decreases to 115,384 as compared to last trading session 120,726. 143 companies advanced, 242 declined and 24 remained unchanged. Highest volumes were witnessed in PTC at 25.595 million closed at Rs18.30 with a gain of Re0.08 followed by PPTA at 24.724 million closed at Rs7.55 with a gain of Re0.06, NML at 15.334m closed at Rs.64.42 with a gain of Rs1.41. Ahsan Mehanti at Shehzad Chamdia Securities said intense selling witnessed in the Karachi Bourse on Tuesday on renewed concern over inflation after power hike proposal presented by finance ministry. Limited foreign interest, rising Non-Performing Loans in the banking sector and retail/institutional profit taking in the oil, fertilizer and banking sectors played a catalyst role in negative activity at KSE. Hasnain Asghar Ali at Aziz Fidahusein said increase in activity by the local corporate and offshore participants infused confidence amongst other sidelined participants, thus allowing them to leave the law and order and political issues to the concerned authorities in command and capitalise on available discounts at the local equity market, available mainly due to recent foreign sell-off that led to low volume price erosion. Reports regarding financial and asset mismanagement in government owned companies however kept the seasoned stake holders in a confused mode, as the recent decline in payout ratios, for which the ongoing circular debt issue is being blamed, did invite accumulation on dips, but the news regarding decline in oil and gas reserves indicates likely decline in profitability, the issue that will certainly shake the confidence of the stake holders in the companies which have established themselves as consistent dividend paying companies. The development will certainly reduce the fair values in case of decline in revenues. Although the news has been initially ignored, as depicted by comparatively high turnover in the companies likely to be impacted despite red numbers, caution is however advised. Consolidation was quite prominent in the low priced and comparatively illiquid stocks, and the index found momentum after early reaction to the concerns regarding reduction in gas output from OGDCs Qadirpur gas field, wherein the bench mark entered red zone. The news that EU has increased duty structure on Chinese products thereby making local produce more attractive, got its reaction and the leading stocks of the sector likely to benefit from the step taken by EU, staged decent run-up, thereby increasing options for the market participants. The known triggers influencing the recent run-up include, a comparatively farfetched anticipation of 100 bps or higher decline in local interest rates, dispatch of tranche by IMF and materialization of commitments made at FODP forum and likely settlement of circular debt issue, all by the year end, are certainly not enough for an unprecedented surge. The development that has the potential of actually fuelling the turnover is probably something else, presumably it may be an early availability of ready board leverage product as desired by the local equity market participants. With inflationary numbers likely to stay sticky, mainly to high sensitivity of the economy with international Oil prices, since the local prices of fuel will now be set by OGRA, rising trend is inevitable starting from upcoming review, likely increase in power tariff will continue to disallow easing up off decline in local interest rate, if the stringent policy of following inflationary numbers (which continue to stay high due to regulatory issues and not demand led) for setting local interest rates continues, besides various issues of high govt policy and below target tax revenues, will disallow smooth track to the economy. Availability of the mentioned leverage product with check on the properties used for manipulation will indeed increase the local strength, thus allowing decent price discovery and are inviting substantial turnover, the local capacity to trade with support of desired leverage tool stands at an average of 500-600 million, if the foreign participation, that is likely to follow the turnover may increase by 30pc, not to forget the valuations, with leverage the consistent stocks (revenue stream) the local strength will be able to trade at multiple of 10.