Pakistan stocks decline due to increased leverage and border security concerns

Pakistan's stock market experienced a correction on Thursday, falling nearly 2 percent.

The downturn was driven by increased leverage and the expiration of December contracts, which coincided with heightened security concerns at the borders, impacting investor sentiment.

Leading the decline were Fauji Fertilizer, Oil & Gas Development Company (OGDC), Pakistan Petroleum (PPL), Mari Petroleum, and Lucky Cement, which together contributed to a substantial 996-point drop in the overall index.

Analysts say falling interest rates and lower returns on alternative investments indicate that equities will remain attractive, providing promising opportunities for investors moving forward.

KSE-100 index shed 1.77% or 1,991.49 points to close at 110,423 points.

Commodities

Oil prices went up on Thursday during the holiday trading period. This increase was mainly because people expect China to inject more money into their economy, and an industry report showed a drop in U.S. crude oil stocks.

China announced they will issue 3 trillion yuan ($411 billion) in special bonds to help their economy.

Additionally, there are higher expectations for fossil fuel supply and demand as Donald Trump is about to become the U.S. president on January 20th.

Brent crude prices gained 0.56% to $73.99 per barrel.

Gold prices went up in Asia on Thursday because the dollar was a bit weaker as markets reopened after Christmas. However, the increase was small because investors were still cautious after the U.S.

Federal Reserve showed a tough stance. Also, traders were not making big moves in this short holiday week, so trading was light. Issues in the Middle East also helped gold prices rise.

International gold prices increased 0.45% reaching $2,628.19 per ounce.

Currency

US dollar eased against PKR in the inter-bank market, down 0.03%. Pakistani currency settled at 278.37 with a gain of 10 paisas. In the open market USD was trading at PKR 279.