Stocks Tossed About By Politics

August 2008 | Market Strategy

Our bearish view on Pakistani stocks continues to play out, with the Karachi Stock Exchange (KSE)-100 index failing to find reliable support. In tune with our expectations, the index has plunged through the symbolic 10,000 mark today, losing as much as 3% at one point, to hit a daily low of 9,739.01. Index heavyweights Oil & Gas Development Co and MCB Bank led the sell-off, which largely appears to have been driven by the parlous political situation. A near-term rendezvous with 9,700 now looks a distinct possibility, and should this level fail to hold we do not rule out another down-leg towards the 2006 low around the 8,700 area.

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