Equities witnessed a stellar day as index edged nearer to 10,000 points level on the back USD2.4bn aid approval by US gov. Volumes also showed a considerable increase as market re-opened to longer hours led by fertilizer scrips on the back of massive increase in urea and DAP sales during August 09. Oil stocks continued to witness interest on reported foreign and local interest spurred by reports that the Petroleum Ministry may amend oil marketing companies margins for smaller OMC's (APL & SHELL both listed as well as Caltex). Financials remained strong ahead of next weeks Monetary policy on rumors that Central Bank may ease CRR and SLR requirements besides allowing forced sale value advantage once again.
As the index continues its incline, we recommend a cautious approach as market is in the over bought zone and expect a correction in the range of 3-5%. Key event today is FoDP meeting in New York and Monetary Policy Statement on September 29, although we do not expect any changes in the discount rate.