| GEO Business|
Stocks up; rupee firms; o/n rates down
| Updated at: 2114 PST, Tuesday, August 17, 2010|
KARACHI: Pakistani stocks rose on Tuesday after falling almost 3 percent the previous day as bargain hunters accumulated shares at attractive prices but dealers said investors were still cautious amid flood worries.
According to the Karachi Stock Exchange (KSE) website, the KSE benchmark 100-share index ended 1.66 percent, or 158.10 points, higher at 9,695.33 on turnover of 53.89 million shares.
"There were some bargain hunters who accumulated shares but the low turnover shows investors are on the sidelines because of the damage the floods may have caused," said Sajid Bhanji, a director at brokers Arif Habib Ltd.
The floods, triggered by torrential monsoon downpours, have swamped Indus river basin, killing up to 1,600 people, forcing 2 million from their homes and disrupting the lives of about 20 million people, nearly 12 percent of the population.
The damage caused by the floods and the cost of recovery could bring long-term economic pain to Pakistan.
Authorities are assessing the damage but the finance ministry said it was hard to give an exact number. It said last week the floods meant the country would miss this year's 4.5 percent gross domestic product (GDP) growth target.
Growth was 4.1 percent in the last fiscal year.
With higher transport costs and food shortages, inflation, and the public anger it could spark, is a major worry. The consumer price index came in at 12.34 year-on-year in July and will head higher.
Prices have been rising sharply in markets across the country, although they traditionally do in the run-up to the fasting month Ramadan.
The government has already been struggling to meet an IMF target for a fiscal deficit at 4 percent of gross domestic product this year. The flood crisis will mean more strain.
In the currency market, the rupee ended firmer at 85.60/65 to the dollar, compared with Monday's close of 85.68/74 because of lack of import payments.
Dealers said the rupee could come under pressure in the short-term because of higher demand for dollars for import payments.
The rupee fell to a record low of 85.80 on July 12 amid high demand for dollars from importers as well as on debt repayments.
In the money market, overnight rates fell to between 11.45 percent and 12.15 percent, compared with Monday's close of 12.50 percent after the State Bank of Pakistan injected 11.5.