KARACHI, Jan 22 Karachi stocks fell over 2 percent on Thursday to its lowest closing since September 2004 as foreign investors sold shares in blue-chip companies, dealers said.
The Karachi Stock Exchange (KSE) benchmark 100-share index .KSE closed 2.25 percent, or 115.77 points, lower at 5020.71 points on a turnover of 72.7 million shares. The index recovered above 5,000 points having earlier hit a low of 4,953.01 points.
"Its a global trend now. Foreign investors are continuously looking for an exit from the market," said Sajid Bhanji, a dealer at Arif Habib Ltd.
Bhanji said local investors were losing confidence in the falling market.
The KSE-index has shed 14.4 percent this month after a 58.3 percent fall in 2008.
The Pakistan market was artificially propped up in late August, when authorities placed a floor under the main index.
The floor was removed on Dec. 15 and the index has lost 45 percent since then.
A 20-billion rupee ($250 million) government support fund began buying blue-chip shares last week but dealers said the fund was buying selectively. In the currency market, the rupee closed almost flat at 79.80/90 to the dollar compared with Wednesday's close of 79.71/81.
Dealers expect the rupee to weaken in short-term as exports were decreasing.
The Finance Ministry published a paper last week in which it projected the rupee to be 82 to the dollar for the 2008/09 fiscal year and 92.7 to the dollar the following fiscal year.
The consumer price index in December was down 0.50 percent from November, when it rose 24.68 percent year-on-year. November's rate was down 0.12 percent from October.
Analysts said the latest data suggested the central bank would not raise the discount rate in the near-term. A six-monthly monetary policy meeting is due to be held on Jan. 31. [ID:nSIN397370]
However, Mohsin Khan, an economist who led IMF negotiations with Pakistan two months ago said Pakistan needs to hike interest rates further to build foreign exchange reserves and dampen inflation despite facing recession. [ID:nISL336768] (Reporting by Sahar Ahmed and Aftab Borka; Editing by Robert Birsel)
The Karachi Stock Exchange (KSE) benchmark 100-share index .KSE closed 2.25 percent, or 115.77 points, lower at 5020.71 points on a turnover of 72.7 million shares. The index recovered above 5,000 points having earlier hit a low of 4,953.01 points.
"Its a global trend now. Foreign investors are continuously looking for an exit from the market," said Sajid Bhanji, a dealer at Arif Habib Ltd.
Bhanji said local investors were losing confidence in the falling market.
The KSE-index has shed 14.4 percent this month after a 58.3 percent fall in 2008.
The Pakistan market was artificially propped up in late August, when authorities placed a floor under the main index.
The floor was removed on Dec. 15 and the index has lost 45 percent since then.
A 20-billion rupee ($250 million) government support fund began buying blue-chip shares last week but dealers said the fund was buying selectively. In the currency market, the rupee closed almost flat at 79.80/90 to the dollar compared with Wednesday's close of 79.71/81.
Dealers expect the rupee to weaken in short-term as exports were decreasing.
The Finance Ministry published a paper last week in which it projected the rupee to be 82 to the dollar for the 2008/09 fiscal year and 92.7 to the dollar the following fiscal year.
The consumer price index in December was down 0.50 percent from November, when it rose 24.68 percent year-on-year. November's rate was down 0.12 percent from October.
Analysts said the latest data suggested the central bank would not raise the discount rate in the near-term. A six-monthly monetary policy meeting is due to be held on Jan. 31. [ID:nSIN397370]
However, Mohsin Khan, an economist who led IMF negotiations with Pakistan two months ago said Pakistan needs to hike interest rates further to build foreign exchange reserves and dampen inflation despite facing recession. [ID:nISL336768] (Reporting by Sahar Ahmed and Aftab Borka; Editing by Robert Birsel)
(Reuters)
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