Pakistani shares fall more than 1%

Karachi: Pakistani stocks fell more than 1 per cent yesterday as dealers said there were expectations that the central bank will increase its key discount rate.

Later in the day, State Bank of Pakistan Governor Shamshad Akhtar confirmed that the central bank had raised the discount rate at which it lends to commercial banks to 13 per cent from 12 per cent.

The Karachi Stock Exchange (KSE) 100-share index was down 1.23 per cent, or 130.30, to 10,448.19 on turnover of over 93 million shares. The KSE-index is down 25.8 per cent since the start of the year and 33.6 per cent lower than a life high on April 21.

Institutional support

"There was institutional support later in the day and the market has almost discounted a rate hike," said Shuja Rizvi, director of broking operations at Capital One Equities Ltd.

The KSE-index recovered from early lows and sources said it was due to the Rs20 billion market fund.

Last week, the International Monetary Fund said Pakistan needs to tighten policy to contain inflation and reduce its current account deficit.

Among the most active companies, volume leader NIB Bank fell 2 per cent to Rs9.80, Arif Habib Securities rose 2.5 per cent to Rs134, while DG Khan Cement shed 4.7 per cent to Rs54.38.