Pakistan stocks end flat as investors react to monetary policy decision

Pakistan stocks closed on a relatively flat note, fluctuating throughout the session as investors reacted to the Monetary Policy Committee’s (MPC) decision to keep the policy rate unchanged, according to an analyst at Ismail Iqbal Securities.

“Anticipation surrounding further developments in the IMF review kept market participants in a wait-and-see mode,” the analyst said.

An analyst at Al Habib Capital said the market remained volatile with negative sentiment prevailing at the PSX.

“However, buying activity emerged in the later hours, driven by expectations of a positive outcome from the ongoing negotiations between the IMF and the government regarding circular debt in the power sector, tax policies, and the sovereign wealth fund”.

Meanwhile, an analyst at Topline Securities reported a fierce tug-of-war between bulls and bears as the market opened on a negative note. The market reacted sharply to the State Bank of Pakistan’s (SBP) decision to maintain the policy rate at 12%, despite a significant decline in inflation.

“This decision dampened investor sentiment, pushing the index to an intraday low of 746 points,” the analyst added.

However, the second half of the session saw a resurgence of buying interest. Market participants responded positively to speculation regarding the possible clearance of the longstanding circular debt.

Commercial banks, cement, and fertilizer sectors were the major laggards in today's session, cumulatively shedding 297 points from the index.

KSE-100 index shed 0.16% or 178.69 points to close at 114,177.66 points.

US dollar eased against PKR in the inter-bank market. Pakistani currency gained 10 paisas to close at 279.95. In the open market USD was trading at PKR 281.6.

Indian Stocks

India's benchmark indexes barely moved on Tuesday, with losses in IndusInd Bank and information technology stocks counterbalanced by gains in other companies. The overall sentiment remained negative due to concerns about the U.S. economy.

Elsewhere in Asia, markets declined following a steep drop in Wall Street equities overnight. This was driven by U.S. President Donald Trump's reluctance to speculate on the possibility of a recession amid ongoing worries about his tariff policies.

BSE-100 index gained 0.25% or 59.33 points to close at 23,441.05 points.

DFM General Index shed 0.2% or 10.45 points to close at 5,125.63 points.

Commodities

Oil prices went up on Tuesday because the U.S. dollar became weaker. However, concerns about a possible U.S. recession and tariffs on the global economy limited the gains.

Investors are also watching OPEC+ as they plan to start bringing oil to the market in April. The weaker dollar made oil cheaper for buyers from other countries.

Brent crude prices increased by 1.13% to $70.06 per barrel.

Gold prices rose on Tuesday as investors focused on U.S. jobs and inflation data that might impact the Federal Reserve's policy decisions amid economic growth concerns.

Tariffs remain a worry, as they may harm growth and drive inflation. If inflation forces the Fed to keep interest rates high, gold might lose some appeal as a non-yielding asset.

International gold prices increased by 0.71% reaching $2,913.03 per ounce.