Emergence

Finally the emergency was declared late evening on 3rd Nov 07, troops were deployed in the capital, broadcasting of private news channels was halt, Chief Justice removed, Constitution suspended & Key Allies of Pakistan denounced Musharraf's action but Musharraf justifies his coup (2nd time) by saying "EMERGENCY IMPOSED IN LARGER NATIONAL INTEREST". This all rounds up in support of a heavy market downfall which is likely to continue until political situation calms.

I would like to suggest that to close the Karachi Stock Exchange for a week till the political crises calms down, so to minimize the loss of Individual & Small Investors. The investors should wait until the International community again supports Musharraf's regime and continuous there trade & investment in Pakistan.

On the other hand U.S. fears hit world markets & markets in Asia and Europe slump Friday, tracking losses on Wall Street overnight as investors worry about a possible end to U.S. interest rate cuts and a slowing American economy. Oil prices reached a new record high of $96.24 a barrel in electronic trading earlier Thursday. But light, sweet crude for December settled 42 cents lower to $93.07 a barrel in afternoon trade on the New York Mercantile Exchange.

Citi shares tumbled after analysts downgraded the company's stock and added that Citigroup may have to cut its dividend in order to raise $30 billion in capital. News of the downgrade hit Citi stock and sparked fears that other major financial players were harder hit by this summer's subprime crisis than originally anticipated. Some investors worry that because the value of many of these mortgage-backed securities has not been determined, firms like Citi may have to take additional losses.

Index	Value	Change	%
DOW JONES INDUS. AVG	13,595.10	27.23	0.20%
S&P 500 INDEX	1,509.65	1.21	0.08%
NASDAQ COMPOSITE INDEX	2,810.38	15.55	0.56%
FTSE 100 INDEX	6,530.60	55.50	-0.84%
CAC 40 INDEX	5,720.42	10.50	-0.18%
DAX INDEX	7,849.49	31.36	-0.40%
NIKKEI 225	16,517.48	352.92	-2.09%
HANG SENG INDEX	30,468.34	1,024.54	-3.25%
BSE SENSEX 30 INDEX	19,976.23	251.88	1.28%
GOLD 100 OZ FUT (USD/t oz.)	808.500	14.800	1.86%
SILVER FUTURE (USD/t oz.)	14.599	0.274	1.91%
U.S. DOLLAR vs EURO	1.4498	0.0092	0.64%
NYMEX CRUDE FUTURE	95.93	2.44	2.61%

Bearish Momentum Continuous

The market failed to keep upward momentum from previous session of 291.62 points due to political unrest, suicide bombings (2nd in a week) at Sargodha killing eight people & rumors of State of Emergence in the country. Investors were also concerned about a ruling expected from the Supreme Court on whether President Musharraf was eligible to have stood for re-election last month. The Karachi Stock Exchange closed at 13,932.41 down 387.01 (-2.70%) on 1st Nov 2007.

The KSE-100 index that made its life high at 14,908.91 points on Oct 22nd has come down 6.549 percent since then as bears finally came out of hibernation and took charge from bulls. Investors should wait but not waste the upcoming buying opportunity mostly in oil & petroleum sector.

Recommendation: Precautious buying.

International

International markets are up surging on record highs & Nymex crude oil touched $96/barrel during intraday trading & closed at $95.49 up $0.96 cents on 31 Oct 07. The up surge was mainly due to failing U.S crude oil inventories with indication of crude oil crossing $100/ barrel pretty soon. The Federal Reserve's move to cut interest rates by a quarter points to 4.5 % also supported prices.

Bombay Sensex also couldn’t sustain intraday high of almost 20,200 points and index failed to register 20000 and closed at 19,724.35 below 113.64 points.