Pakistan stocks rally to record highs on strong valuations

Pakistan's stock market reached a new all-time high, driven by strong valuations in the oil, banking, and pharmaceutical sectors.

Speculations ahead of the State Bank of Pakistan (SBP) policy rate announcement next month, increasing SBP foreign exchange reserves, and declining government treasury bond yields amidst low inflation contributed to the record close at the Pakistan Stock Exchange (PSX).

On Thursday, the KSE-100 index crossed the 100,000 mark for the first time. Analysts attributed this milestone to the recent International Monetary Fund loan and improved fiscal and monetary discipline, which have boosted investor confidence.

KSE-100 index gained 1,274.55 points or 1.27% to close at 101,357.32 points.

Indian IT stocks are rising as a stronger dollar increases their profits and Trump's pro-business policies create optimism. Domestic fund managers are investing more, seeing value in large-cap stocks and the defensive sector.

The stronger dollar benefits Indian IT exporters, who earn a lot in dollars. Additionally, expectations of Trump's potential tax cuts in the US are boosting hopes that companies will increase IT spending.

BSE-100 index lost 306.76 points or 1.2% to close at 25,348.74 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 stayed steady today after a ceasefire between Israel and Hezbollah began, hinting that the violence in the oil region might be ending. Additionally, the anticipation that OPEC+ will extend its production cuts on Sunday helped maintain stable benchmarks.

Oil prices fell on Friday, heading for a weekly drop of over 3%, due to reduced concerns about supply risks from the Israel-Hezbollah conflict and expectations of ample supplies in 2025, despite OPEC+ expected to extend output cuts.

Israel and Hezbollah traded accusations of ceasefire violations, but the ceasefire reduced oil's risk premium, lowering prices. OPEC+ postponed its policy meeting to December 5, where they are expected to discuss extending production cuts.

Brent crude prices declined 0.82% to $72.68 per barrel.

Gold prices rose on Friday, helped by a weaker dollar and ongoing geopolitical issues. However, gold has fallen by 3% in November, marking its worst monthly performance since September 2023.

This decline is due to traders expecting higher tariffs under the Trump administration, which could lead to interest rates staying high for a longer period.

International gold prices surged 0.74% reaching $2,660.72 per ounce. In Pakistan, gold prices decreased by PKR 2,100 to PKR 277,300/tola.

Currency

US dollar eased against PKR in the inter-bank market, down 0.01%. Pakistani currency settled at 278.05 with a gain of 3 paisas. In the open market USD was trading at PKR 280.