Pakistani stocks end down; rupee firms

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KARACHI – Thin trade and cautious investors pushed Pakistani stocks down on Friday as traders awaited the monetary policy announcement, due the next day, dealers said.
Analysts expect the State Bank of Pakistan (SBP) to leave the key policy rate unchanged at 14 percent in its monetary policy for the subsequent two months.
The Karachi Stock Exchange (KSE) benchmark 100-share index ended 0.10 percent, or 11.33 points, lower at 11,552.92 on turnover of 66.39 million shares.
“Dull activity was witnessed as investors remained cautious ahead of SBP (State Bank of Pakistan) monetary policy announcement this Saturday,” said Ahsan Mehanti, director at Arif Habib Investments Ltd.
In the currency market, the rupee continued to firm versus the dollar amid fewer import payments and increased supply of dollar.
The rupee closed at 84.95/85.05 to the dollar, compared with Thursday’s close of 85.20/30.
Dealers said the rupee was expected to remain range-bound in coming days, and added that a steady inflow of dollars, especially in the form of remittances, is likely to help the rupee avoid a fall despite steadily rising dollar demand.
However dealers said the rupee could face some pressure as the central bank lifted restrictions on the forward cover facility against imports, imposed in July 2008.
In the money market, overnight rates stayed unchanged at the top level of 13.90 percent in tight liquidity and dealers said the State Bank of Pakistan injected funds worth 47 billion rupees ($551 million)through a reverse repo against scheduled outflows of 46.7 billion Pakistani rupee ($548 million).