Pakistan stocks close positive on economic optimism

Pakistan's stock market ended on a positive note on Thursday as government ruled out any additional taxes in the shape of mini-budget, reducing chances of inflationary pressures.

Government officials and the International Monetary (IMF) team are in talks for the last three days and news media reports suggest the IMF has no concerns about Pakistan not being able to meet its revenue targets.

Investor interest in the banking sector surged after Pakistani banks received temporary relief from the Islamabad High Court against a government tax related to shortfalls in private sector lending. This relief will last until a final decision is made, with hearings starting on December 3.

KSE-100 index gained 836.47 points or 0.9% to close at 94,191.89 points.

Indian stocks closed flat on Thursday, with losses in the PSU bank, pharma, FMCG, and metal sectors.

However, there was some buying in the auto, IT, financial services, realty, media, private banks, and infrastructure sectors of Nifty. PSU banks, pharma, FMCG, and metal sectors continued to face selling pressure.

Experts said the market is hoping for better domestic business and economic data. They expect a rebound in government spending, which slowed down this year due to national and state elections.

Separately, India’s BSE 100 Index lost 1.46% or 366.69 points to close at 24,828.40 points.

The Dubai Financial Market (DFM) General Index lost 0.08% or 3.58 points to close at 4,729.23 points.

Commodities

Oil prices recovered on Thursday. The American Petroleum Institute (API) weekly report showed crude stocks declined last week.

Crude oil stockpiles in the United States for the week ending November 8 fell by 777,000 barrels, compared to a rise of 3.132 million barrels in the previous week. The market consensus estimated that stocks would increase by 1 million barrels.

The upside for the black gold might be limited as the US Dollar Index climbed to the highest level since November 2023 after the US Consumer Price Index (CPI) inflation data for October came in line with expectations.

A firmer greenback makes USD-denominated oil more expensive for holders of other currencies, which can reduce demand.

Brent crude prices increased 0.5% to $72.64 per barrel.

Gold continued its downward trend for the fifth consecutive day, falling to its lowest level since September 19, as the US Dollar remains strong during Thursday's Asian session.

Expectations that US President-elect Donald Trump's policies will boost growth and inflation, leading the Federal Reserve to pause its easing cycle, are supporting higher US Treasury yields. This, in turn, lifts the USD to its highest level since November 2023, putting pressure on gold.

International gold prices declined 1.29% reaching $2,547.91 per ounce. In Pakistan, gold prices increased by PKR 1,400 to PKR 271,900/tola.

Currency

The PKR strengthened against the US dollar, up 0.05% in the interbank market. Pakistani currency settled at 277.74, a gain of 11 paisas against the US dollar. In the open market, USD was trading at PKR 280.