Pakistani stocks gain sharply; rupee firms

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Pakistani stocks gain sharply; rupee firms

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Pakistani stocks gained sharply on Monday after a rise in domestic urea prices.

31 October,2011 08:59 pm

The KSE benchmark 100-share index ended 2.66 per cent, or 307.21 points, higher at 11,868.88. Volume jumped to 101.13 million shares compared with 81.08 million shares traded on Friday.“A surprise increase in urea prices over the weekend triggered a major rally in fertiliser stocks, as investors believed that their earnings will increase substantially going forward,” said Samar Iqbal, a dealer at Topline Securities.“In line with fertiliser stocks, oil and banking stocks also improved, thereby pushing the index higher.”Stocks at Fauji Fertiliser bin Qasim rose 4.11 per cent to 62.36 rupees, while Engro Corp jumped 5 per cent to 118.23 rupees.Dealers said healthy corporate results over the past few days had also helped the index post gains.In the currency market, the rupee firmed to 86.48/53 to the dollar from 86.62/66 on Friday, amid soft dollar demand from importers.“There was not much of a demand for the dollar today, so we saw the rupee gaining value,” said a dealer at a local bank.Dealers said healthy remittances from Pakistanis living abroad were also supporting the rupee, but cautioned a widening current account deficit means that the local currency could experience downward pressure in days ahead.Pakistan’s current account deficit surged to a provisional $908 million in September, compared with a deficit of $201 million in the previous month.The deficit for the July-September quarter was a provisional $1.209 billion, compared with $597 million in the same period last year, according to data from the State Bank of Pakistan.In the money market, overnight rates ended higher at around 11.75 per cent, little changed from Friday’s close, and dealers said the market was now eyeing Wednesday’s fortnightly treasury bills auction.