Bulls on bourses wary of political uncertainty

Afzal Bajwa
Political conflicts on issues ranging from the local government to eligibility of President Asif Ali Zardari in the wake of Supreme Courts decision against National Reconciliation Ordinance (NRO) snubbed equities that were otherwise poised to grow.
Expressing its internal strength, Pakistans capital market tested notable psychological barrier on the predominant benchmark by hitting intra-day high on Tuesday last. But margin hunters corrected the market down on the same day. Although the bulls tried their level best during the week ending Friday last to resurrect yet the Karachi Stock Exchanges KSE-100 Index suffered a net loss of nearly a percentile. The market opened the week under review on positive note.
However, bullish players were wary of prevalent political uncertainty after the release of the apex courts detailed judgment on the NRO case. Therefore, the market closed the first session of the week that was, on negative note bagging net loss of a fraction of a percentile. Bulls were, however, vehement to grip the market and they pushed the Index above the psychological barrier of 10,000 points during the second session of the week under review. External deterrents helped the bears to resist the market gain.
Eventually, the Index failed to sustain intra-day high on Tuesday last. After going through massive ebb and flow followed by intra-day correction the market settled below the psychological barrier still surged by two-thirds of a percentile.
The bears that have clipped the gains during the second session of the week took over the floors of bourses by the midweek. Resultantly, the market had to shed significant value on Wednesday last. Second last session of the week that was, had gone clearly bearish.
Although the market opened the trade on Thursday last on positive note yet the bears used the political ambiguity as catalyst and prevailed forcing the market to lose about a couple of percentiles in one go. Oversold market managed to attract fresh buying towards the closing hours on Friday last. This late buying chiefly on part of the foreign investors helped the market to close the week in positive zone.
However, the resistant bears did not allow the equities to recover even the losses they had suffered during the preceding session.
Fluid state of politics in the country with embattled President Zardari and his partys government in a fix over the implementation of the SCs orders regarding the defunct NRO has left especially the local investors with their fingers crossed.
On the contrary technical factors including the international crude oil, fertilizer, financial, and energy sector stocks offering handsome pay outs for the period ending Dec 2009, and overall economic stabilization were to encourage growth in the market.
But the corresponding external environment mainly politics as well as the law and order was not conducive to short-term investment.
Thus local players preferred to stay on sidelines. Even the institutions were cautious of the political perplexity. Only the foreign investors were leading the direction in the market and, interestingly, they were least bothered about the domestic political scenario.