Pakistan stocks surge ahead of IMF meeting amid positive economic indicators

Pakistan’s stock market closed over 80,000 points after two months as broad based buying was witnessed in bluechips ahead of the IMF Executive Board meeting on September 25, which is expected to approve a $7 billion facility.

This optimism was fueled by robust economic data, including a $75 million current account surplus in August, and rising remittances and exports. Additionally, the Asian Development Bank’s affirmation of a $2 billion annual concessional loan until 2027 and a strong rupee further contributed to the positive market sentiment.

The KSE-100 index gained 1.22% or 970.20 points to close at 80,461.34 points.

Indian shares eased off on Wednesday, dragged down by information technology and pharma stocks in the run up to the US Federal Reserve's rate decision, due later in the day.

Information technology companies, which earn a significant share of their revenue from the US, lost to post their worst session in six weeks.

India’s BSE 100 Index shed 0.24% or 63.95 points to close at 26,848.08 points.

The Dubai Financial Market (DFM) General Index shed 0.11% or 5.0 points to close at 4,390.20 points.

Commodities

Oil fell on Wednesday after two sessions of gains following reports of weekly build in US crude and fuel stocks. Analysts say probably the uncertainty of the magnitude of the likely Fed rate cut later today also kept investors cautious. The Federal Reserve is expected to make its first interest rate cut in more than four years with markets forecasting a 50 basis point cut.

Brent crude prices fell 1.19% to $72.82 per barrel.

Gold prices edged higher on Wednesday as the market awaits the Fed’s interest rate decision. Gold tends to benefit in low interest rate environments, as reduced yields on competing assets like bonds lower the opportunity cost of holding non-yielding bullion. Moreover, geopolitical developments are bolstering safe-haven demand for gold.

International gold prices gained 0.24% reaching $2,579.93 per ounce. In Pakistan, gold prices eased by PKR 300 to PKR 267,700/tola on Wednesday.

Currency

US dollar eased further against PKR, down 0.1% in the inter-bank market. Pakistani currency settled at 278.04, a gain of eight paisas against the US dollar. In the open market USD was trading at PKR 280.70.