Pakistan stocks hit new record high fueled by institutional buying

Pakistan stocks hit a new record high on Thursday, driven by strong institutional buying during the earnings season.

Investors are optimistic about the upcoming monetary policy meeting on November 4, 2024, with expectations of a major interest rate cuts. This has led to a buying spree, pushing the index to new heights.

Investor confidence has also improved due to a recent constitutional amendment that reduced political uncertainty.

Additionally, many investors are moving their fixed income investments into stocks, further boosting the market.

KSE-100 index posted 5th largest single-day gain of 1,751.45 points or 2.01% to close at 88,945.99 points.

Indian stocks closed negative on Thursday, with mixed market trends. Early trades saw buying activity in the auto, IT, financial services, and pharma sectors. However, the market faced significant headwinds due to sustained foreign investor selling.

The primary reason for these outflows is the elevated valuations in India, making markets like China and Hong Kong appear relatively cheap and attractive.

India’s BSE 100 Index lost 0.17% or 43.03 points to close at 25,741.75 points.

The Dubai Financial Market (DFM) General Index closed flat at 4,464.19 points.

Commodities

Oil prices are rebounding from recent losses due to fears of potential supply disruptions amid the Middle East conflict.

Israeli airstrikes and escalating attacks from Iran-backed Hezbollah are fueling these concerns.

Meanwhile, oil prices faced pressure from a significant increase in US stockpiles, with the EIA reporting a rise of 5.474 million barrels, much higher than expected.

Brent crude prices declined 1.66% to $74.78 per barrel.

Gold saw some buying interest on Thursday. Ongoing US political uncertainty ahead of the November 5 Presidential election, along with tensions in the Middle East, are significant factors supporting this safe-haven asset.

Additionally, falling US Treasury bond yields have led to profit-taking on the US Dollar (USD), providing further backing for gold.

Gold prices hit a new record high on Wednesday due to fears of a full-scale war in the Middle East and political uncertainty before the close U.S. Presidential election.

International gold prices increased 0.75% reaching $2,737.43 per ounce. In Pakistan, gold prices decreased by PKR 2,300 to PKR 283,100/tola on Thursday.

Currency

US dollar gained ground against PKR, up 0.03% in the inter-bank market. Pakistani currency settled at 277.84, a loss of 12 paisas against the US dollar. In the open market USD was trading at PKR 280.