Karachi Stocks Exchange ends flat, rupee firms

KARACHI: Karachi Stocks Exchange (KSE) ended flat on Monday in thin volume as investors stayed on the sidelines awaiting details following the country's decision not to seek a new IMF loan, dealers said.

Pakistan will also not ask for an extension when its existing loan package ends on September 30, because it has no balance of payments crisis and has enough foreign exchange reserves, a finance ministry official told Reuters on Sunday.

The KSE benchmark 100-share index closed 0.03 percent, or 3.18 points, higher at 11,356.64 on turnover of 31.2 million shares.

"Uncertainty on the government relationship with IMF kept investors on the side lines and that is why volumes remained thin today," said Samar Iqbal, a dealer at Topline Securities Ltd.

In the currency market, the rupee firmed to close at 87.63/67 to the dollar, from Friday's close of 87.75/78.

"The rupee weakest level was 87.85 per dollar," said a dealer at a foreign bank.

Some dealers said the central bank may have verbally intervened in the currency market to support the rupee.

The rupee hit a record low of 87.92 to the dollar on Friday and dealers expect the pressure to continue especially after Pakistan will not be receiving inflows from the IMF and also due to increased import payments and a negative economic outlook.

In the money market, overnight rates ended at a top level of 13.50 percent, compared with Saturday's close of 13.25 percent amid tight liquidity in the interbank market.

Copyright Reuters, 2011