ISLAMABAD, May 30 (Reuters) - The Karachi Stock Exchange (KSE) dropped on Wednesday with many investors not taking risks ahead of Pakistan’s budget announcement, and amid concerns about a weakening rupee which hit a record low, dealers said.
The KSE’s benchmark 100-share index fell 1.42 percent, or 200.1 points, to close at 13,871.75 points on volume of 88.2 million shares, compared to Tuesday’s close of 14,071.85.
After posting two consecutive record lows against the dollar this week, the Pakistani rupee weakened further to close at a new low at 93.44/52. It closed at 92.90/95 on Tuesday.
The currency is under sustained pressure because of increased import payments, especially for oil.
“The declining Pakistani rupee ... affected the market,” said Samar Iqbal, a dealer at Topline Securities.
“Uncertainty in the global stock and currency markets forced investors to stay on the sidelines ahead of the federal budget (announcement).”
The government is scheduled to announce the budget for the 2012-2013 fiscal year on June 1.
Overnight rates in the interbank market rose to 11.90 percent, compared to 11.50 percent on Tuesday, because of decreased liquidity.
Reporting by Qasim Nauman; Editing by Nick Macfie