Pakistan stocks decline on profit taking

Pakistan's stock market saw much anticipated profit-taking on Tuesday.

The day started strong with good buying activity in key sectors due to positive economic news. However, gains were short-lived as investors decided to book profits, especially in major sectors, causing a sharp decline during the day.

Despite this drop, the market managed to recover a bit before closing, showing that investors still have confidence.

Sazgar Engineering's stock fell by 5.5% today. This decline followed a drop in their sales of four-wheelers. In November, they sold 584 units, a big decrease from 1,002 units sold in October.

The banking sector faced pressure due to worries about the Advance-to-Deposit Ratio (ADR). As a result, stocks of major banks like BAHL, MCB, UBL, and BAFL ended the day in negative territory.

The KSE-100 index lost 1,073.73 points or 0.98% to close at 108,896.65 points.

Indian shares saw little change on Tuesday as investors anticipated important inflation data from both India and the United States this week, which could give hints about possible interest rate cuts in both countries.

The U.S. Consumer Price Index (CPI) data, expected on Wednesday, will likely influence the Federal Reserve’s interest rate decisions, which could affect foreign investments in emerging markets like India. India’s own inflation data is due the following day, with expectations that inflation has decreased in November.

BSE-100 index gained 19.37 points or 0.07% to close at 26,144.85 points.

DFM General index shed 63.51 points or 1.31% to close at 4,784.60 points.

Commodities

Crude oil prices fell on Tuesday after China released disappointing international trade data. This decline in oil prices highlights the weak demand for traditional energy, mainly due to the global economic slowdown, especially in China.

China, being the largest oil importer, significantly impacts the crude oil market with its demand. According to LSEG, China's oil imports averaged 10.94 million barrels per day in the first ten months of the year, which is a 3.7% decrease from the same period last year.

Brent crude prices declined 0.5% to $71.78 per barrel.

China's central bank has resumed its gold purchases after a six-month pause, leading to a surge in gold prices. This move is part of China's strategy to diversify its reserves and protect the economy from currency-related risks.

The increased demand for gold among Chinese and Indian households further supports this trend. Additionally, traders are watching US economic data closely, as it may impact the Federal Reserve's upcoming rate decisions. Overall, gold is gaining renewed importance as a stable investment in uncertain economic times.

International gold prices surged 0.46% reaching $2,675.2 per ounce. In Pakistan, gold prices increased by PKR 1,000 to PKR 277,400/tola.

Currency

US dollar steadied against PKR in the inter-bank market, up 0.03%. Pakistani currency settled at 278.05 with a gain of 8 paisas. In the open market USD was trading at PKR 279.