Shares in the Karachi Stock Exchange (KSE) ended down in a volatile session on Wednesday as investors become more riskaverse amid foreign outflows worth $20 million in the previous session, traders said.
The benchmark 100-share index at the KSE closed down 0.77 percent, or 261.38 points, at 33,537.42. "The market opened with a negative sentiment as more than $20 million foreign outflow was witnessed in the last session," said Fawad Khan, head of research at KASB Securities Pvt Ltd. China's rate cut on Tuesday failed to provide any relief and the market did not take it very positively, Khan added. Investors will closely watch foreign outflows, which will determine the market direction, he said. Oil and gas explorers led the decline, with Oil and Gas Development Co Ltd falling 0.9 percent and Pakistan Petroleum Ltd losing 2.8 percent.
The rupee ended weaker at 104.00/104.05 against the dollar, compared with Tuesday's close of 103.95/104.05. Overnight rates in the money market rose to 6.50 percent from Tuesday's close of 6.25 percent.
Earlier on Monday, shares declined in line with other Asian markets after a rout in Chinese equities and a sharp drop in US dollar unnerved investors. US dollar exchange rate in the interbank market appreciated by Rs2.10 on Monday to reach a 17-month high of Rs104.10. The report said that dominant exporter groups are trying to create instability in the market by buying US dollars in huge quantity.
Experts are of the view that the decrease in the value of rupee under the current circumstances will cause inflation in the country.
Currency dealers, however, emphasised that Haj pilgrims were the biggest buyers of foreign currencies, including Saudi riyals and US dollars. Since a major part of Saudi riyals are being consumed by pilgrims, less foreign currencies are available to sell in Dubai for buying and remitting dollars into the country.
The State Bank has recently allowed currency dealers to transfer dollars from Dubai directly into their accounts in Pakistan instead of surrendering dollars to a bank and then getting them within a week's time. The step was taken on demand of currency dealers and for speedy supply of dollars in the open market.
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