Updated :
Friday July 13 , 2012 6:13:27 PM
Pakistan's main stock market closed down on Friday after Moody's downgraded the country's government bond ratings, denting investor confidence, dealers said.
The Karachi Stock Exchange benchmark 100-share index dropped 69.45 points, or 0.48 percent, to close at 14,332.29 on volume of 92.99 million shares.
"The sentiment in the market was positive at the start of the session, but later on in the day, when Moody's announced a downgrade of Pakistan's sovereign bonds, investor confidence was dented and they chose to sell," said Samar Iqbal, a dealer at Topline Securities.
Moody's Investors Service downgraded Pakistan's foreign and local currency bond ratings from B3 to Caa1 on Friday.
"The main driver of Moody's one-notch downgrade of Pakistan's government bond ratings is the increasing strain on the country's external payments position as a result of a rising trade deficit and decline in capital inflows," Moody's said in a statement.
"Moreover, weak government finances, structural inflationary pressures and domestic political uncertainties are adding to Pakistan's external vulnerabilities and debt sustainability."
In the currency market, the rupee closed weaker at 94.43/49 to the dollar, compared with 94.33/38 on Thursday.
Overnight rates in the money market closed lower at 11.50 percent, compared with 11.90 percent on Thursday, because of slightly increased liquidity in the market.
Pakistan's main stock market closed down on Friday after Moody's downgraded the country's government bond ratings, denting investor confidence, dealers said.
The Karachi Stock Exchange benchmark 100-share index dropped 69.45 points, or 0.48 percent, to close at 14,332.29 on volume of 92.99 million shares.
"The sentiment in the market was positive at the start of the session, but later on in the day, when Moody's announced a downgrade of Pakistan's sovereign bonds, investor confidence was dented and they chose to sell," said Samar Iqbal, a dealer at Topline Securities.
Moody's Investors Service downgraded Pakistan's foreign and local currency bond ratings from B3 to Caa1 on Friday.
"The main driver of Moody's one-notch downgrade of Pakistan's government bond ratings is the increasing strain on the country's external payments position as a result of a rising trade deficit and decline in capital inflows," Moody's said in a statement.
"Moreover, weak government finances, structural inflationary pressures and domestic political uncertainties are adding to Pakistan's external vulnerabilities and debt sustainability."
In the currency market, the rupee closed weaker at 94.43/49 to the dollar, compared with 94.33/38 on Thursday.
Overnight rates in the money market closed lower at 11.50 percent, compared with 11.90 percent on Thursday, because of slightly increased liquidity in the market.
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