Pak stocks beat back bomb-effect

The Karachi Stock Exchange8217;s benchmark 100-share index ended 0.30 percent,or 31.33 points,higher at 10,447.84.

It was the highest close for the KSE-100 since Aug. 20,2008,when it ended at 10,525.99. The index touched an intraday high of 10,491.82 points.

Volume rose to 221.95 million shares from 205.11 million traded on Friday.

There was some concern in the market after the attacks,especially the one in Peshawar,which pulled the index down in the negative zone for some time,said Sajjad Mankani,associate director at brokerage BMA Capital Management.

Militants attacked the U.S. consulate in the city of Peshawar but were held off by security forces hours after a suicide bomber killed 38 people elsewhere in the northwest,officials said. ID:nSGE63409N

The attacks underscore the danger posed by militants in nuclear-armed U.S. ally Pakistan after a year of military offensives which have dealt the Islamists significant setbacks.

The KSE-100 index fell as low as 10,403.83 after the attacks.

However,the market quickly shrugged off the violence primarily because foreign investors are pretty active despite all the concerns,and are leading the sentiment,said Mankani.

Net foreign portfolio inflows stood at 113 million in March 8212; the second highest monthly inflow ever,after inflows of 127 million in September last year.

On Friday,the net inflow of foreign portfolio investment in the stock market was 12.7 million.

Investors have been encouraged in recent days by signs of growing political stability after a long-awaited constitutional package was submitted in parliament last week.

The bill,which is expected to be approved this week,will transfer many of President Asif Ali Zardari8217;s powers to the prime minister and should end months of political wrangling. ID:nSGE631030

In the currency market,the rupee firmed to close at 84.23/26 to the dollar compared with 84.26/44 on Saturday,amid soft demand for the U.S. currency.

There was pretty low demand for the dollar from importers today and some selling was also seen from exporters,which supported the rupee,said a brokerage dealer.

Dealers said the rupee was expected to move in a narrow band in days ahead,though some downward pressure may be seen as import payment pressure grows.

In the money market,overnight rates ended at 11.0-12.0 percent,compared with a close of 11.0 percent on Saturday,and dealers said rates were likely to hold steady for now.

Inflows worth 59.3 billion rupees from maturing government securities are scheduled for Thursday,dealers said.

But the impact of the inflows would be offset by a fortnightly treasury bill auction on Wednesday,for which the central bank has set a target of 65 billion rupees,they said.