The benchmark KSE 100-share index last week demonstrated that it was close to its last resistance level around 6,000 points as the current spate of nervous selling seemed to have overrun its course followed by revival of selective buying at the terribly lower levels. The KSE 100-share index suffered fresh sharp fall of 1,026.90 points at 6,487.52 during the week.

The out-of-the-court settlement of CFS MK-II positions of Rs7 billion at 12.5 per cent discount of rate prevailing on Dec 24, 2008, had positive impact on the market as a good number of shares managed to finish modestly recovered under the lead of mutual funds, modarabas, leasing and some leading shares on other counters.

Under the agreed formula, financers would lift shares worth Rs3.05 billion and the public sector institutions the identical amount to settle the longstanding dispute among the parties.

It is too early, however, to predict about the new year trading on capital market as much would depend on the positive news from the political front but some analysts are optimistic that beginning could be better on technical ground alone.

Although the fourth consecutive week suffered a fall of over 1,000 points or 13 per cent making the total to about 60 per cent in December 2008 indications are that some of the leading investors have decided to return to the market.

The outgoing calendar year witnessed many ups and downs both in term of lows and highs, the index level of 15,622.30 of all-time high may not be bettered in the near future. Its lowest of the year was noted at 6,400 points. Its single session rise of 960 points after the extension of the capital gains tax by two years was another all-time record.

But the market also witnessed a number of official steps to put it back on the rails including floor under the KSE 100-share index. Although it did more damage to the trading pattern than good as after its lifting on December 15, after about four months, continued to inspire fresh selling by the foreign investors who were out to unload their long positions at a discount of well over 30 per cent.

The year witnessed many crucial phases both in terms of lowest ever daily volume and massive price fall notably in oil, banking and on the blue chip counters owing to persistent liquidation.

The market remained depressed through out the last week as liquidity crunch continued to haunt investors in the backdrop of increasing tension with India.

Threatening statements by the Indian leaders in the aftermath of Mumbai incident seemed to have created pre-war hysteria on the stock market as some of the leading investors hastened to liquidate their positions at the falling prices but without finding any willing buyer.

“War with India may not be imminent but persistent threats from across the borders has made political situation look like as was reflected by steep fall in the daily volume,” analyst Hasnain Asghar Ali said.

And added to it was various interpretations of Sindh High Court ruling on the outstanding positions on the badla market and talk of revision petition in the Supreme Court and out-of-the-court settlement on the issue, said a analyst Ahshan Mehanti.

According to market sources meetings were being held between the brokerage houses to resolve the issue out of the court to give a breathing space for the unprecedented fall in the trading history of the KSE.

Another analyst Ashraf Zakaria says positive news on market support fund of Rs20 billion after the IMF approval should have created a sense of security among the investors but delay in its launching is also taking its toll.

He says there are more sellers than the buyers as no one is inclined to make fresh commitments even at the lower levels on all the bluechip counters despite the fact that they provide an attractive bait for the future capital gains after the recovery process is initiated.

Minus signs again dominated the list, under the lead of bank, insurance and oil sectors as leading among them ended the week with sharp fall and so did blue chips on the other counters.

FORWARD COUNTER: Leading shares on this counter also followed the lead of their counterparts in the ready section without any transaction as no one was inclined to make fresh commitments.