KSE index ends on 2-month high, rupee firms

KARACHI: Karachi Stock Exchange (KSE) index closed on a two-month high on Tuesday, despite a fall in world shares, led by the fertiliser sector following an increase in urea prices, dealers said.

Engro Corp raised its urea prices by 17 percent or 202 rupees per bag and analysts said other fertiliser companies are likely to follow suit.

The KSE benchmark 100-share index rose 1.92 percent, or 225.03 points, to end at 11,933.28, its highest close since August 3.

Turnover was 105.66 million shares, compared with 43.2 million shares traded on Monday.

"FFBL (Fauji Bin Jordan), and Fatima (Fatima Fertiliser) remained among the most active scripts as their earnings will increase substantially after the recent increase in urea price by 202 rupees per bag," said Samar Iqbal, a dealer at Topline Securities Ltd. Fatima Fertiliser shares closed up 5.27 percent, Fauji Bin Qasim rose 5 percent, while Engro ended 3.38 percent higher.

Dealers said bargain hunters also moved in on hopes of an interest rate cut by the State Bank of Pakistan on Saturday.

In July, the SBP cut the key policy rate by 50 basis points to 13.5 percent.

In the currency market, the rupee firmed to 87.33/38 to the dollar compared with Monday's close of 87.45/50 because of a fall in international oil prices.

However the rupee hit a record low of 87.92 to the dollar last month.

A decision by the government not to seek a new International Monetary Fund loan and speculation of a rate cut would likely add to the pressure on the rupee.

Copyright Reuters, 2011