Pakistan stocks post gains; Indian, Dubai stocks range bound

Pakistan stocks closed higher on Monday amid upbeat economic outlook and likely approval of IMF executive board for $7 billion new EFF on September 25.

Continuing its last week’s trend, equities commenced the day on a positive note, but in the latter half, the market saw some profit-taking. The KSE-100 index gained 0.2% or 158.08 points to close at 79,491.14 points.

Indian shares also gained on Monday, underpinned by rising metal stocks on a favorable US rate cut outlook.

A rate cut would support physical metals demand, as well as put pressure on the dollar, according to analysts. A softer US dollar makes metals cheaper for holders of other currencies, like India. India’s BSE 100 Index gained 0.09% or 22.91 points to close at 26,895.90 points.

The Dubai Financial Market (DFM) General Index gained 0.34% or 14.75 points to close at 4,395.24 points.

Commodities

Oil prices rose amid expectations of a US interest rate cut, despite weaker data from China and ongoing demand concerns. While crude production in the Gulf of Mexico resumed after Hurricane Francine, nearly 20% of oil and 28% of natural gas output remain offline.

Markets are cautious ahead of the Federal Reserve’s policy meeting, with expectations of a 50 basis point interest rate cut. Lower interest rates could stimulate economic growth and increase demand for oil and gas, but supply disruptions continue to affect forecasts.

Brent crude prices surged 0.68% to $72.10 per barrel.

Gold surged supported by the weakness of the US dollar and the decline in bond yields amid growing expectations of a significant cut in US interest rates this week.

In addition, the gold index benefited from the European Central Bank’s decision to cut its main interest rate last week, reflecting growing confidence among policymakers that inflation in the region is steadily declining.

International gold prices gained 0.04% reaching $2,580.07 per ounce. In Pakistan, gold prices increased by PKR 1,700 to PKR 268,000/tola.

Currency

US dollar eased some more against PKR, down 0.01% in the inter-bank market. Pakistani currency settled at 278.12, a gain of 4 paisas against the US dollar. In the open market USD was trading at PKR 279.