Pakistan stocks range-bound following termination of power producers’ contracts

Pakistan stocks opened positively but stayed range-bound on Monday. Hub Power Company (HUBCO) fell 9.15% due to an early contract termination, and Engro Fertilizer (EFERT) dropped 4.1% after reporting lower-than-expected earnings and dividends.

The day also saw a notable shift in asset allocation from fixed income to equities, driving increased liquidity.

Despite positive sentiment, slower activity is possible due to political uncertainty and profit-taking going forward.

An analyst at JS Global Capital advised booking profits now and waiting for a dip to buy again.

The KSE-100 index lost 0.26% or 222.02 points to close at 85,261.39 points.

Indian stocks rose on the first trading day of the week. This was due to heavy buying in banks, IT, and financial services stocks, along with a positive global market trend.

The market is showing resilience, with low Q2 earnings expectations and falling oil prices already considered. The IT and financial sectors are seeing buying interest after recent corrections.

Top gainers included Tech Mahindra, HDFC Bank, Larsen & Toubro, ITC, Infosys, IndusInd Bank, Titan, and HCL Technologies.

India’s BSE 100 Index gained 0.59% or 156.45 points to close at 26,647.87 points.

The Dubai Financial Market (DFM) General Index gained 0.32% or 14.34 points to close at 4,455.02 points.

Commodities

Oil prices dropped on Monday after OPEC reduced its 2024 demand forecast for the third consecutive time. OPEC now predicts a growth of 1.9 million barrels per day (bpd) in 2024, down from 2 million bpd.

For 2025, the forecast is 1.6 million bpd, down from 1.7 million bpd.

Meanwhile, the market is keenly watching the Middle East for potential conflict between Israel and Iran.

Brent crude prices fell 2.04% to $77.42 per barrel.

On Monday, gold prices rose, driven by expectations that the Federal Reserve will continue to cut interest rates due to a favorable inflation outlook.

Additionally, escalating geopolitical tensions in the Middle East are providing further support for the safe-haven asset.

International gold prices gained 0.03% reaching $2,649.25 per ounce. In Pakistan, gold prices surged by PKR 200 to PKR 275,700/tola on Monday.

Currency

US dollar remained steady against PKR, up 0.01% in the inter-bank market. Pakistani currency settled at 277.66, a loss of 03 paisas against the US dollar. In the open market USD was trading at PKR 280.