| GEO Business|
| Stocks post gains; rupee eases to new low|
| Updated at: 2045 PST, Friday, July 09, 2010|
KARACHI: In the stock market, the index ended higher amid hopes that margin buying would soon be reintroduced in the market.
KSE authorities and the Securities and Exchange Commission of Pakistan (SECP) met last month to discuss margin buying and other leveraged products, and decided to form a committee required to submit its recommendations within 15 working days.
A meeting of the stakeholders to discuss the issue took place on Thursday, and continued on Friday as well, and dealers said they expected a decision soon.
"We are hoping that leverage products would soon be reintroduced and that is definitely helping market sentiment, as visible in the improving volumes" said Sajid Bhanji, director at Arif Habib Ltd.
The Karachi Stock Exchange's (KSE) benchmark 100-share index, ended 1.15 percent, or 113.41 points, higher at 9,974.40.
Turnover rose to 102.75 million shares from 77.94 million shares traded on Thursday.
Dealers said another meeting was held between exchange officials and tax authorities on Friday to discuss the modalities of a new capital gains tax imposed from July 1, though no decisions were yet taken.
The absence of margin buying and the capital gains tax had hurt market sentiment in recent days, with volumes falling to their lowest in 18 months more than once this week.
However, dealers said they expected things to improve further in days ahead.
The rupee eased marginally on Friday to end the week at yet another record closing low, but dealers said improved dollar supplies were restricting any sharp slide in the rupee's value.
The rupee ended at a record 85.67/72 to the dollar, down from 85.65/70 on Thursday.
"There have been a lot of payments this week, which has obviously had an impact on the rupee," said a dealer at a local bank.
"There have been heavy payments for oil imports as well as some for debt retirement, which increased the dollar demand pretty sharply," he said.
However, dealers said improved dollar supplies were likely to prevent a sharp fall in the rupee's value.
"For the last two days we have seen exporters selling dollars in the market to benefit from the higher rates, which has restricted the rupee's slide," said another dealer.
"For now, we expect the rupee to move in a narrow band around the current levels," he said.
In the money market, overnight rates ended at 12 percent, little changed from a day earlier, dealers said net inflows worth 95 billion rupees ($1.1 billion) were scheduled for next week, though their effect was likely to be offset by a central bank treasury bills auction on Wednesday, which has a target of 100 billion rupees.