Pakistan stocks hit record highs amid lower inflation, expected interest rate cut

Pakistan's stock market ended strongly on Monday, setting all-time highs during trading and at market close.

The drop in inflation to 4.9% for November excited investors, who now expect a significant rate cut in the upcoming monetary policy meeting.

Trading volume surged by 70%, reaching 1,554 million shares — the highest since December 18, 2023.

The fertilizer, cement, and commercial banks sectors were the top performers in today's trading session.

KSE-100 index gained 1,917.63 points or 1.89% to close at 103,274.95 points.

Separately, the Indian stock market faced some selling pressure in the morning but recovered, brushing off economic growth concerns. India's Q2FY25 GDP growth rate was 5.4%, the lowest in nearly two years, surprising many.

Following weak Q2 results, the market anticipated slower GDP growth, leading to a buying spree after the morning's decline.

Experts are not worried about the Indian economy's health. Currently, global cues like the Fed's policy decision and US President-elect Donald Trump's tariff and geopolitical decisions are key market triggers.

BSE-100 index gained 147.97 points or 0.58% to close at 25,694.58 points.

The Dubai Financial Market (DFM) General Index gained 0.5% or 23.96 points to close at 4,847.34 points.

Commodities

Crude oil prices started the week with gains due to positive factory output data from China and ongoing conflicts in the Middle East.

The Caixin/S&P Global PMI for November showed China's factory output expanding at the fastest rate in five months, with new orders increasing the most since February 2023.

Despite last week's ceasefire, Israel resumed bombing Lebanon. Separately, OPEC+ is meeting on Thursday to discuss output, with most expecting a delay in the rollback of production cuts for next year.

Brent crude prices increased 1.0% to $72.56 per barrel.

Gold prices dropped because a stronger dollar made the metal less attractive.

Trump threatened the BRICS countries with 100% tariffs if they try to use another currency besides the dollar.

Gold traders are waiting for important economic data from the US this week, as the market expects a 25% rate cut by the Federal Reserve.

International gold prices declined 0.38% reaching $2,640.87 per ounce. In Pakistan, gold prices decreased by PKR 1,700 to PKR 274,500 per tola.

Currency

The PKR strengthened against the US dollar, up 0.04% in the interbank market. Pakistani currency settled at 277.97, a gain of 8 paisas against the US dollar. In the open market, USD was trading at PKR 280.