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KARACHI: Pakistani stocks ended higher on Wednesday, led by a rally in banking shares, as investor sentiment rose on hopes of strong corporate results.
The Karachi Stock Exchange (KSE) benchmark 100-share index rose 0.47 per cent, or 59.22 points, to 12,603.67 points.
Turnover fell to 194.11 million shares, from a 22-month high made the previous day as 322.47 million shares were traded.
“The focus of investors has shifted towards banks and mostly the smaller ones because of expectations of healthy corporate earnings,” said Shuja Rizvi, a dealer at Al-Hoqqani Securities.
Soneri Bank gained 20.49 percent at 5.88 rupees while Bank Alfalah closed up 2.75 percent at 13.82 rupees. In the currency market, the rupee ended firmer at 90.75/79 to the dollar, compared with Tuesday's close of 90.86/91 amid lack of import payments.
But dealers expect pressure on the local unit to continue due to rising international oil prices, which hit a nine-month high on Tuesday.
The rupee touched a record low of 91.28 to the dollar in January, pressured by worries about higher payments for oil imports and the country's overall economic health.
The State Bank of Pakistan cautioned this month that it would be a challenge to finance the country's projected current account deficit, which is expected to widen further in coming months because of debt repayments and a lack of external aid.
The current account recorded a provisional deficit of $2.633 billion in the first seven months of the 2011/12 fiscal year, compared with a deficit of $96 million in the same period last year, according to data from the State Bank of Pakistan.
Dealers said they were also cautious after the International Monetary Fund (IMF) advised Pakistan to take immediate steps to tackle growing budget pressures and raise interest rates to contain inflation.
The central bank kept the key policy rate flat at 12 per cent for the next two months in its monetary policy announcement earlier this month.
The IMF in February projected a widening of Pakistan's budget deficit in the 2011/12 fiscal year to 7 per cent of gross domestic product, compared with the government's revised budget target of 4.7 per cent.
In the money market, overnight rates ended flat at 11.90 per cent, unchanged from Tuesday's close, because of a lack of liquidity in the interbank market.
