Pakistan stocks rebound as investor confidence surges

The Pakistan Stock Exchange (PSX) experienced significant volatility on Tuesday, with the benchmark index witnessing sharp fluctuations throughout the day. Despite an early dip due to selling pressure, particularly from leveraged investors, the market staged a strong recovery in the second half as investor activity remained robust.

"Market sentiment improved as margin-related selling eased and investors began to buy quality stocks at lower levels," an analyst at Topline Securities said.

Ahsan Mehanti of Arif Habib Corp noted that stocks turned bullish following reports that the International Monetary Fund (IMF) Executive Board is set to meet on May 9.

The meeting will discuss the Staff Level Agreement (SLA) for a new $1.3 billion Resilience and Sustainability Facility (RSF) and the first review of the $7 billion Extended Fund Facility (EFF), which includes the approval of a $1 billion disbursement.

Easing political tensions, along with calls from the United States, China, and Turkey for restraint in Pakistan-India relations, also contributed to the market's positive close. Expectations of policy easing by the State Bank of Pakistan (SBP) further bolstered investor confidence.

KSE-100 index gained 0.71% or 808.28 points to close at 114,872.18 points.

Currency

US dollar eased against PKR in the inter-bank market. Pakistani currency gained 05 paisas to close at 281.02. In the open market USD was trading at PKR 282.3.

Indian Stocks

On Tuesday, India's stock markets, Nifty and Sensex, closed slightly higher despite ups and downs in trading. Investors were careful because of global political issues.

Big companies like Reliance Industries, Infosys, and Tata Consultancy Services saw strong buying, helping the markets stay stable.

Foreign investors have put over $4 billion into Indian stocks in the last nine days, making it their longest buying streak since July 2023.

They are investing because they expect a trade deal between the US and India, find Indian stocks attractively priced, and trust India's steady growth even with global challenges.

BSE-100 index surged 1.26% or 316.54 points to close at 25,430.81 points.

DFM General Index gained 0.48% or 24.83 points to close at 5,241.30 points.

Crude Oil

Oil prices dropped on Tuesday as investors grew worried about weaker global demand. Tensions between the U.S. and China—two of the biggest oil buyers—are making the situation worse. Their ongoing trade dispute is causing uncertainty, leading to lower expectations for oil demand.

The U.S. government, under President Donald Trump, has imposed large taxes on imports in an effort to change global trade. However, this approach has raised concerns that it could lead to a worldwide economic slowdown.

Brent crude prices decreased by 1.73% to $64.72 per barrel.

Gold Prices

Gold prices fell on Tuesday as the stock market went up. Usually, gold becomes more valuable when stocks drop because people see it as a safe option during uncertain times.

The decrease in gold prices also happened because trade tensions between the U.S. and its trading partners eased, making gold less attractive as a safe investment.

Investors were also waiting for U.S. economic data to understand what the Federal Reserve might do next with its policies.

International gold prices declined 0.81% to close at $3,309.13 per ounce. In the local market, gold prices increased PKR 2,100 to 349,200 per tola.