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Pakistani stocks end higher on interest rate cut hopes

October 02, 2012

The Karachi Stock Exchange.—Reuters Photo

KARACHI: Pakistani stocks closed higher on Tuesday as investors remained optimistic about the monetary policy announcement on Friday, traders said.

The Karachi Stock Exchange (KSE) benchmark 100-share index ended 0.57 per cent, or 88.35 points, higher at 15,648.29 – falling short of an all-time peak of 15,676 points – on total volume of 140.79 million shares.

“The primary reasons are the inflation numbers. People are speculating ahead of the monetary policy. Inflation is coming down so the possibility is high that discount rate will be lower,” said Ahsan Mehanti at Arif Habib Corp.

“There is an improvement in global oil prices and improvement in local cement prices.” The central bank is expected to announce a monetary policy decision on October 5.

Pakistan’s consumer price index (CPI) rose 8.79 per cent in September from a year earlier, the Pakistan Bureau of Statistics said on Monday.  The year-on-year rate in August was 9.1 per cent. On a month-on-month basis, the CPI increased by 0.79 per cent from August, according to the bureau.

In the currency market, the Pakistani rupee ended weaker at 94.90/94.95 to the dollar compared to Monday’s close of 94.88/94.94.

Overnight rates in the money market ended flat at 7.50 per cent.