KARACHI - Investors in Karachi stock exchange were on a roller coaster throughout the outgoing week, as their moods dictated by the developments on political front. Karachi stock market started off the outgoing week with a positive momentum and the KSE-100 index appreciated by 660 points in the first two days of the outgoing week in view of settling of political uncertainty after the resignation of President Musharraf on Monday. However, the fate of deposed judges emerged as an outstanding issue and the coalition partners were once again seem divided on how it should be resolved. This uncertainty again negatively affected the sentiments of investors that resulted KSE-index plunged by 2.6 per cent on weekly basis and closed at 9.994 points. Moreover, weak economic data coupled with net selling from foreign funds also added pressure on equities and local currency. Foreign investors remained jittery, reflected in NCCPL figures which registered a decline of $25mn during outgoing week. However, average daily volumes increased by an impressive 54 per cent to 142mn shares over the week but remained depressed as compared to the last 12 months average volumes of 193mn shares. Market capitalization ended at US$41bn down 46 per cent from its peak of US$75bn as of April18, 2008. Musharraf's dramatic exit from the presidency has paved the way for a rally of 660 points over two days. The resignation put an end to the major bone of contention and brought some stability to the market. The improved investor confidence was also evident from better trading volumes which crossed 200mn shares mark after 41 sessions on Tuesday and stood at 211mn shares but the rally came to end, as soon as the political uncertainty reappeared in the coalition, as a result of which significant selling pressure was witnessed on last three trading days of the week. Analysts said that decent financial result announcement by OGDC, MCB, NBP, ABL and Lucky cement had spurred activity in the stock market but the re-emergence of political uncertainty has overshadowed the activity. On the other hand, the rupee saw sharp recovery after political uncertainty seemed over and gained 3 per cent against dollar in first two sessions of the outgoing week. However, high July current account deficit, up 19 per cent YoY and declining forex reserves, down 3.5 per cent WoW along with the new wave of political uncertainty weakened the rupee which was down 0.3 per cent WoW against dollar. Analysts were of the view that market sentiment would be derived by developments on the political front, especially the issues regarding the reinstatement of judges and nomination of the new president. And the upcoming results of NBP, BAFL, PAKRI and KAPCO are also expected to act as market stimulators. Analysts said that swift resolution of the outstanding political issues is likely to help reverse the prevailing bearish sentiments.