KSE 100-index sheds 184 points, ends at 12,179

KSE 100-index sheds 184 points, ends at 12,179
KARACHI: The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.69 percent, or 184.25 points, lower at 12,179.81on turnover of 87.31 million shares.

Stocks ended lower on Thursday ahead of the announcement of the budget for the next fiscal year, but dealers said an expected removal of a capital gains tax on individual investors should boost to the market.

The 2011/12 (July-June) budget is due to be unveiled on Friday.

According to media reports, the government may decide to remove the capital gains tax. A 10 percent capital gains tax is imposed on stocks held for six months or less and 7.5 percent on stocks held between 6 months to a year.

In the currency market, the rupee edged lower to close at 85.93/98 to the dollar from 85.92 a day earlier, amid steady dollar demand.

"The demand for the dollars is pretty steady, but inflows were good as well today, so the rupee id not fall much," said a dealer at a foreign bank.

The rupee hit a record low of 86.50 last week and dealers said the local unit may face some pressure in days ahead amid increased demand for dollar for import payments and a bleak outlook.

Dollar falls in Asia over weak US data

Dollar falls in Asia over weak US data
TOKYO: The dollar fell in Asian trade Friday amid a broad selling of the greenback following weak US economic indicators, despite growing concerns over a possible Greek debt default, dealers said.

The euro rose to $1.4191 and 115.03 yen in Tokyo morning trade from $1.4141 and 114.96 yen in New York Thursday.

The dollar fell to 81.04 yen from 81.29 yen.

The US unit dipped late Thursday following an report showing US jobless claims last week headed higher after two weeks of declines.

Washington also left unrevised its estimate of first-quarter economic growth at a tepid 1.8 percent. Most analysts had expected a rise to 2.0 percent.

Daisaku Ueno, chief analyst at Gaitame.Com Research Institute, said dealers see no further deterioration in sentiment for the euro after Jean-Claude Juncker, who heads the eurozone finance ministers, suggested the IMF may withhold its payment next month on Greece's bailout.

Juncker said the fifth tranche in a 110-billion-euro loan package could be hampered by IMF rules forbidding the lender of last resort to release funds without a 12-month guarantee of solvency.

Japan on Friday reported a rise in core consumer prices for the first time in more than two years, mainly as a result of an increase in fuel prices, but the economic data were largely ignored by forex dealers.

The core consumer price index, which excludes volatile food prices, rose 0.6 percent in April from a year earlier, the first increase since December 2008. The upturn was in line with market expectations.

But the April rise is unlikely to signal an end to Japan's long-standing deflationary problems as it stems mainly from higher costs for oil products because of increased import prices and supply problems.

Japan's massive earthquake and tsunami in March damaged oil refineries and disrupted distribution of petrol, kerosene and other petroleum products.

Asian shares edge up but Tokyo hit by CPI data

Asian shares edge up but Tokyo hit by CPI data
HONG KONG: Asian shares were mostly higher Friday but Tokyo edged down after data showed consumer prices rose for the first time in
28 months in April due to higher fuel prices following the March 11 disaster.

Hong Kong opened 0.12 percent higher, Sydney gained 0.43 percent, Seoul rose 0.86 percent and Shanghai added 0.18 percent.

Tokyo's Nikkei slipped 0.24 percent by the break after the government released figures showing prices rose 0.6 percent year on year last month, the first increase since December 2008.

Dealers sold up as the data, which excludes volatile food prices, pointed to a jump in costs for oil products due to higher import prices and supply problems. Analysts said the jump does not indicate an end to the country's deflationary woes.

"The CPI uptick came mostly from higher materials costs being passed on to consumers rather than an increase in demand," and that could hurt consumer spending, Hideyuki Ishiguro, a strategist at Okasan Securities, told Dow Jones Newswires.

The Japanese market was also weighed by a slightly stronger yen.

In early Asian trade the dollar fetched 81.22 yen, down from 81.29 in New York late Thursday and well off the 82.00 a day earlier.

The euro bought 114.99 yen, down from 115.06 in New York while it edged down to $1.4135 from $1.4141 in New York.

The euro remained under pressure amid concerns that Greece could default on its debt repayments as Athens warned that it would go bankrupt without the next tranche of a multi-billion-dollar bailout.

However, the International Monetary Fund has said it will not allow the cash to be released unless Greece provides "assurances" on how the country will fund its future.

The US currency was slightly weaker after worse-than-expected figures raised concerns over the world's biggest economy.

The Labor Department announced that jobless claims headed higher after two weeks of declines, while the government also left unrevised its estimate of first-quarter economic growth at 1.8 percent.

Most analysts had expected a rise to 2.0 percent.

Despite the disappointing figures the Dow Jones Industrial Average eked out a small gain of 0.07 percent on Thursday.

On oil markets New York's main contract, light sweet crude for July delivery gained 29 cents to $100.52 a barrel and Brent North Sea crude for July was 20 cents higher at $115.25.

Gold opened in Hong Kong at $1,523.00-$1,524.00 per ounce, up from Wednesday's close of $1,525.00-$1,526.00.

KSE-100 index gains 27.40 points

KSE-100 index gains 27.40 points
KARACHI: Stocks extended gains on Friday amid hopes that the government will announce the removal of a capital gains tax in the upcoming 2011/12 budget, dealers said.

The 2011/12 (July-June) budget is due to be unveiled on June 3.

According to media reports, the government may decide to remove the capital gains tax. A 10 percent capital gains tax is imposed on stocks held for six months or less and 7.5 percent on stocks held between 6 months to a year.

Officials from the finance ministry have declined to comment.

"There is a feeling in the market that the capital gains tax will be removed, and this is helping the sentiment," said Mohammed Sohail, chief executive of brokers Topline Securities.

"This hope is likely to keep the market positive in the sessions ahead of the budget, and if indeed the tax is removed, it should result in increased activity in the market," he said.

The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.22 percent, or 27.40 points, higher at 12,225.22 on turnover of 79.64 million shares.

In the currency market, the rupee eased 85.65/75 to the dollar from 85.57/a day earlier, amid slightly higher dollar demand from importers.

The rupee hit a record low of 86.50 on Monday and dealers said the local unit may face pressure amid increased demand for dollar for import payments and a bleak outlook.

"There are some import payments next week, so the dollar demand would rise and the rupee will see some pressure," said a dealer at a foreign bank.

There are also concerns about the growing tensions with the West, which could choke off much needed foreign aid.

The rupee has lost more than 1.25 percent of its value since then, almost the same as its total loss of 1.53 percent in 2010.

In the money market, overnight rates edges slightly lower and closed at around 13.50 percent, compared with the previous day's close of 13.90 percent.

Business News

Business News
May 27/5/2011
KSE-100 index gains 27.40 points
Asian shares edge up but Tokyo hit by CPI data
Dollar falls in Asia over weak US data

May 26/5/2011
Euro firms on China scholar's investment comment
Asian shares up on Wall St rise, bargain buying
Oil up in Asian trade after rise in US equities

Oil up in Asian trade after rise in US equities

Oil up in Asian trade after rise in US equities
SINGAPORE: Oil rose in Asian trade Thursday, tracking gains in US equities markets, analysts said, while dealers seemed to ignore data showing a surge in stockpiles.

New York's main contract, light sweet crude for July delivery, gained 36 cents to $101.68 a barrel, while Brent North Sea crude for the same month was up 30 cents to $115.23.

"The WTI was $1.73 higher (in New York late Wednesday), settling at $101.32, which was a two-week high because the equity market was high," said Shailaja Nair, a Singapore-based Platts analyst.

US stocks posted modest gains Wednesday, snapping a three-day losing streak, despite disappointing manufacturing data from the US, the world's largest economy and number one oil consumer.

A bearish report from the Department of Energy (DoE) Wednesday that showed US crude stocks rose 600,000 barrels in the week to May 20 appeared to have a muted impact on sentiment.

The weekly DoE report also said US gasoline inventories jumped 3.8 million barrels in contrast to predictions of a drop.

Gasoline figures are being closely watched ahead of the peak-demand US driving season in the starting next week, when many Americans begin hitting the road for their summer holidays.

Some analysts think higher prices have forced consumers to cut their fuel use.

Natixis analyst Nic Brown pointed out that it was the fourth week in a row of weak US demand for oil products -- with demand off four percent from a year earlier.

"Volatility remains high and sentiment is constantly shifting," said Michael Fitzpatrick of the Kilduff Report.

Prices had been given a lift by reports Tuesday from Goldman Sachs and Morgan Stanley in which they raised their 2012 forecasts for Brent to around $130 a barrel.

Asian shares up on Wall St rise, bargain buying

Asian shares up on Wall St rise, bargain buying
HONG KONG: Asian markets began the day on a high Thursday as dealers picked up undervalued stocks following a recent sell-off while the first gain for the Dow in three days also provided some support.

Tokyo was 1.29 percent higher by the break, Sydney gained 1.10 percent, Hong Kong opened 0.58 percent stronger while Shanghai added 0.72 percent and Seoul jumped 1.23 percent.

"Asian markets are opening stronger, and we expect it to be a risk-on day in the region," Credit Agricole said in a note to clients, according to Dow Jones Newswires.

The rallies followed a Dow gain of 0.31 percent on Wednesday.

Resource firms were among those leading the gains as commodity prices began to rise, with oil rallying after Goldman Sachs and Morgan Stanley raised their 2012 forecasts for the cost of Brent to $130 a barrel.

The rises also came despite a surprising 600,000-barrel increase in US crude stockpiles in the week to May 20, confounding analyst expectations of a fall.

New York's main contract, light sweet crude for July delivery, gained 36 cents to $101.68 a barrel, while Brent North Sea crude for the same month was up 30 cents to $115.23.

Crude was also given a fillip by gains in equity markets, which indicated improving sentiment.

The gains came after big losses in recent sessions caused by worries over the European debt crisis and data from China suggesting the world's number two economy was beginning to ease.

In the eurozone the Greek debt crisis continues to unsettle after sharp exchanges between the European Central Bank, which opposes any restructuring of its obligations, and politicians hoping to find some way out of an impasse.

The downgrading of Athens' debt rating by Fitch on Friday, the downgrading of Italy's outlook by Standard & Poor's and rising concern over Spain's economy have also brought the European crisis back into focus.

However, despite the debt woes the euro rose in early trade after Wang Yong, a professor at the People's Bank of China's training institute, said Beijing should expand purchases of eurozone sovereign debt.

He also said China should increase direct investment into Europe. Such moves would help alleviate the global crisis, he added.

The comments sent the euro up to $1.4136 from $1.4083 late Wednesday in New York and to 115.86 yen from 115.40.

The dollar was worth 81.96 yen, up from 81.89 yen in New York.

Shanghai rose after a five-day sell-off caused by economic worries that were magnified by data showing a preliminary HSBC Purchasing Managers Index had slipped to a 10-month low, pointing to a slowdown in manufacturing.

In Tokyo, office equipment and camera maker Ricoh jumped 4.5 percent on a report in the Nikkei business daily that it was planning to sack 10,000 people worldwide as it tries to streamline.

Gold opened in Hong Kong at $1,525.00-$1,526.00 per ounce, up from Wednesday's close of $1,523.00-$1,524.00

Euro firms on China scholar's investment comment

Euro firms on China scholar's investment comment
TOKYO: The euro firmed during Asian trade Thursday after a Chinese scholar published a media commentary arguing that Beijing should expand purchases of euro-zone sovereign debt.

Investors flocked to the single currency after Wang Yong, a professor at the People's Bank of China's training institute, wrote in his piece that China should also increase direct investment into Europe.

For China, such moves should both help alleviate the global crisis and contributes to "counter-protectionism strategy," giving Beijing more leverage to negotiate for concessions in trade talks, Wang wrote.

The piece triggered buying of the euro, which jumped to $1.4136 and 115.86 yen from $1.4083 and 115.40 yen in New York Wednesday.

Still, traders said the Greek debt concerns should limit the euro's gains as investors remained cautious amid uncertainty about how the fiscally-strapped nation's problems could be resolved.

"While we continue to see a market- and euro-friendly outcome (on Greece) as the most likely on a multi-week view, political risks make a further euro/dollar breakdown very real," BNP Paribas analysts said in a note to clients.

The euro's gain was also magnified in part due to thin trading in Asia, traders said.

The dollar was at 81.96 yen, nearly flat from 81.89 yen in New York.