Pakistan stocks rally as political uncertainty diminishes

Pakistan stocks bounced back on Monday. The market was positive after political uncertainty decreased when the Senate approved the 26th Constitutional Amendment Bill 2024 with a two-thirds majority on Sunday evening. The National Assembly also passed this bill.

Speculations about company earnings and lower lending rates helped boost activity at the Pakistan Stock Exchange (PSX).

The KSE-100 index gained 0.95% or 807.42 points to close at 86,057.52 points.

Indian stock markets struggled on Monday as investors sold shares to take profits during the Q2 earnings season.

Gains in HDFC Bank, Asian Paints, M&M, Reliance Industries, Maruti Suzuki, and Tech Mahindra (up 0.4% to 2.6%) couldn’t offset losses in Kotak Bank, Bajaj Finserv, IndusInd Bank, Adani Ports, Ultratech Cement, Bajaj Finance, Infosys, and TCS.

India’s BSE 100 Index lost 0.43% or 113.18 points to close at 26,196.60 points.

The Dubai Financial Market (DFM) General Index gained 0.19% or 8.71 points to close at 4,477.96 points.

Commodities

Crude oil prices rose by over 1% on Monday after falling 7% last week. The drop was due to concerns about demand from China and fewer worries about supply issues in the Middle East.

Traders started buying again after the sharp decline. The extra cost added to oil prices because of the Middle East conflict has decreased significantly.

Brent crude prices surged 1.46% to $74.13 per barrel.

Gold prices are up even though the fundamentals are weak. The dollar has surged recently, and expectations for a big interest rate cut by the Federal Reserve have decreased.

The Fed is now expected to cut rates by 25 basis points in November, after a surprising 50 basis point cut in September. Higher inflation and a strong job market in the US have changed investor expectations for a larger rate cut.

International gold prices increased 0.61% reaching $2,738.03 per ounce. In Pakistan, gold prices increased by PKR 500 to PKR 282,300/tola on Monday.

Currency

US dollar remained steady against PKR, up 0.02% in the inter-bank market. Pakistani currency settled at 277.68, a loss of 07 paisas against the US dollar. In the open market USD was trading at PKR 280.