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PSX register highest weekly gain in a decade after record losses over rupee fluctuation
A sign of the Pakistan Stock Exchange is seen on its building in Karachi, Pakistan January 11, 2016. REUTERS/Akhtar Soomro/File Photo

PSX register highest weekly gain in a decade after record losses over rupee fluctuation

KARACHI: The benchmark index of the Pakistan Stock Exchange gained 2,537 points during the outgoing week, recovering by 7.5% since fluctuations in the exchange rate and economic uncertainty wreaked havoc in the financial markets.

The benchmark KSE-100 index closed the outgoing week at 35,703 points, gaining Rs 400 billion in share values and market capitalisation reaching Rs7,200 billion.

The outgoing week’s gains—the biggest increase in the market for over a decade—have so far helped the index recover 40% of its accumulated losses in the previous seven weeks.

The rupee registered record lows against the US dollar following the announcement of a $6 billion bailout agreement with the International Monetary Fund foreseeing a “market-determined rate” for the Pakistani currency.

The news sent shockwaves through the money and financial markets, with the KSE-100 plunging almost 4,000 points from 37,130 points on April 26 to a low of 33,166 at the end of last week—the market’s worst week in over a decade and half.

But, as confidence plummeted, Prime Minister’s Adviser on Finance Dr Hafeez Shaikh flew into Karachi last Friday for a meeting with stockbrokers to regain their trust.

The markets have since started a slow journey to recovery, with the Pakistani rupee also achieving slow but steady gains against the US dollar in both the interbank and open markets.

During the week, the greenback also slid from its peak of Rs154 in the open market to Rs151.50 at the end of the week. It was helped by declines in the interbank, where the greenback settled at Rs151.91 at the end of the week.

The renewed confidence and hopes of economic stability also affected prices of precious metals, with gold prices declining by Rs900 high from of Rs72,100 per tola (11.33 grams) during the outgoing week to close at Rs70,400 per tola (11.33 grams) on Friday.