Fall in current account deficit boosts Karachi stock market by 49 points

KARACHI: The Karachi stock market witnessed a bullish trading session on the last trading day of the week Friday as State Bank of Pakistan’s data, which revealed that Pakistan’s current account deficit shrunk by 36 percent to $8.86 billion for the fiscal year ending 2009, encouraged investors to go for buying activities.

The Karachi Stock Exchange (KSE) 100-share index gained 48.59 points or 0.63 percent to close at 7,764.01 points as compared to 7,715.42 points of the previous trading session. The KSE 30-share index increased by 58.52 points and closed at 8,348.35 points as compared with 8,289.83 points. The KMI 30 index also surged 85.55 points to close at 11,606.76 points as against 11,521.21 points. The market turnover went down by 5.41 percent and traded 183.81 million shares as compared to previous session’s 194.33 million shares. The overall market capitalisation was up by 0.61 percent to close at Rs 2.285 trillion as compared with Rs 2.271 trillion. Out of total 289 companies, 158 closed in the positive zone, 108 in negative, while 23 remained unchanged.

“Positive developments on the political and foreign relations front gave the investors yet another reason to stay optimistic,” said analyst at Aziz Fida Husein and Co Hasnain Asghar Ali. Oil and gas exploration stocks led the gains while cement stocks led the turnover.

With economic indicators supporting the decline in interest rates likely to be announced in the upcoming monetary policy, except for volatile law and order situation on macro level and lingering ready board leverage issue on micro level, no major hurdles are in sight that can disrupt the momentum, he added. Furthermore, with notification regarding withdrawal of withholding tax on sale still awaited the local participants have already started trading on healthy turnover based on assumption of likely cost cutting measure. Substantial increase in the turnover has been successful in inviting sidelined corporate and high net worth participants, both from selling and buying strategies.

“Oil sector led the rally in expectations of record payouts followed by cement sector while rise in international oil prices, recovery in global capital markets and continued foreign interest kept the market in the green zone,” said senior analyst at Shahzad Chamdia Sec Ahsan Mehanti. The KSE 100 index opened in the positive zone with a gain of 28.96 points and at the end of the day closed at 7,764.01 points with a gain of 48.59 points. link.....