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Pakistani stocks close near a 29-month high; rupee firms
KARACHI | Tue Nov 30, 2010 6:54am EST
KARACHI Nov 30 (Reuters) - Pakistani stocks, led by the energy sector, ended near a 29-month high on Tuesday despite an increase in the key policy rate the previous day, which dealers said had been factored in by the market.
Pakistan's central bank on Monday announced an increase in its key policy rate to 14 percent from 13.5 percent to combat persistent inflation due to government borrowing from the State Bank of pakistan.
This move was expected by most analysts and dealers said the market had priced in this move in the previous sessions.
The Karachi Stock Exchange's benchmark 100-share index .KSE ended 0.64 percent, or 71.33 points, higher at 11,234.76, its highest close since July 2008.
Turnover rose to 165.17 million shares,compared to 90.29 million shares traded on Monday.
"The increase in the policy rate had been anticipated and now the uncertainty is over so investors started to build new positions," said Sajid Bhanji, director at brokers Arif Habib Ltd.
Dealers said there was renewed interest in the energy sector, the heaviest weighted on the KSE-index, as international oil prices rose 2.4 percent on Monday.
In the currency market, the rupee PKR= firmed against the dollar to 85.70/77, compared with Monday's close of 85.80/85 amid lack of import payments and following a hike in the key policy rate.
However dealers expect some pressure on the local unit because of rising global oil prices.
In the money market, overnight rates closed between 13 percent and 13.50 percent, compared with the previous day's close of 13.40 and dealers said they were waiting for the treasury bill auction scheduled for Wednesday in which they expect a rise in the cut-off yields.
Pakistani stocks close near a 29-month high; rupee firms | Reuters
