KARACHI: Pakistani stocks ended higher on Monday but off the day's peak as foreign investors sold their holdings amid concerns over strained ties between civilian leaders and the military.
Dealers said the market rose early, after the return to Pakistan of President Asif Ali Zardari, whose medical treatment in Dubai triggered speculation he may resign. Tensions have been rising over a memo accusing the country's generals of plotting a coup.
It is not clear when the deeply unpopular Zardari, who has uneasy ties with the army, will return to work. He flew into the southern city of Karachi.
“There was some optimism in the market in the morning after Zardari's return, as investors thought that this might bring to an end the speculation regarding the future of the government,” said Shuja Rizvi, a dealer at brokers Al-Hoqani Securities.
“However, foreign investors, probably still concerned about the situation, emerged as sellers in the later part, dr iving the market sentiment lower, and though the index ended up, it was much lower than the high reached earlier in the day.”
Net selling by foreign investors in the Karachi stock market stood at $11.24 million last week, according to official data.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended up 0.5 per cent, or 54.89 points, at 11,083.03, after hitting an intraday high of 11,161.35. Turnover fell to just 36.45 million shares, down from 47.64 million on Friday.
Meanwhile, the rupee eased against the dollar amid increased demand for the US currency from importers, which dealers said could keep the rupee under slight pressure near-term.
“There was an import payment of about $60 million today, and the inflows were lower than that, and hence the rupee fell,” said a dealer at a foreign bank.
The rupee ended at 89.76/81 to the dollar, compared with Friday close of 89.60/65. It hit a record low of 89.93 to the dollar last week.
“The inflows this week are pretty steady, so the rupee may not fall too sharply, but still it is likely to hover around the 89.90/dollar mark,” said the dealer.
In the money market, overnight rates ended at top rate of 11.90 per cent, up from 9.0 per cent on Friday, amid short liquidity, dealers said.
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