| GEO Business|
| KSE 100-index ends flat, below 9200|
| Updated at: 0050 PST, Wednesday, September 24, 2008|
KARACHI: Karachi's 100-index ended flat on Tuesday despite a downgrade in the outlook for the country's debt as the market remained propped up by a floor on the index imposed last month.
Moody's Investor Services downgraded the outlook for Pakistani debt to negative and highlighted the foreign exchange market's doubts over when funds would arrive to bolster dangerously low currency reserves.
The Karachi Stock Exchange (KSE) benchmark 100-share index ended a marginal 0.01 percent, or 0.71 points, lower at 9,199.51 on turnover of 4.2 million shares.
"If there was no floor we would have seen massive selling by local and foreign investors," said Shuja Rizvi, director of broking operations at Capital One Equities Ltd.
"It seems now it will be very difficult to attract foreign investment."
The KSE board imposed a floor on the benchmark index on Aug. 28 to stop if falling below 9,144 points. The floor is due to be reviewed on Thursday but dealers do not expect it to be removed.
Authorities also banned short selling in the ready and futures markets for a month from Wednesday, when trading in the October contract begins.
Dealers said investors were worried about a weak economic outlook with the rupee hitting a record low of 78.55 on Monday, inflation at more than 25 percent and dwindling foreign reserves.
Foreign currency reserves were down to $8.91 billion in the week that ended on Sept. 13. Analysts said $8.91 billion was not even enough to cover two full months of imports.