KSE, o/n rates end down, rupee weakens

KARACHI: Karachi Stock Exchange (KSE) ended lower on light trade on Monday, as investors stayed away because of concerns regarding the security situation in Karachi, dealers said.

Fresh political and ethnic violence gripped Karachi over the past three days, leaving up to 44 people dead and taking the death toll for July to about 185, city police said on Monday.

"The deteriorating law and order situation in the city kept the market under selling pressure as investors remained cautious," said Samar Iqbal, a dealer at Topline Securities Ltd.

KSE benchmark 100-share index ended 0.29 percent, or 36.67 points, lower at 12,440.10.

Volume fell to 32.81 million shares, compared with 126.25 million shares traded on Friday.

Dealers said there could be some interest in the coming days in certain stocks on hopes of healthy corporate profits due to be announced soon.

In the currency market, the rupee weakened to close at 86.32/37 to the dollar, compared with Friday's close of 86.14/19, because of higher demand for dollars for import payments.

The rupee hit a record low of 86.50 in May, and held steady largely due to increased remittances from Pakistanis working abroad. Since about mid-July, however, it has begun to weaken slightly.

According to official data, remittances rose to a record $11.2 billion in 2010/11 fiscal year, an increase of 25.77 percent from the previous year.

In the money market, overnight rates ended lower at between 13.50 percent and 13.75 percent, compared with Saturday's close of 13.90 percent, but dealers said rates were likely to hover around the top levels due to tight liquidity.

Copyright Reuters, 2011