Pakistan stocks register 5th largest single day gain driven by strong institutional buying

Pakistan's stocks rallied on Friday, driven by strong institutional buying. Oil and gas exploration stocks surged after positive news from an offshore project in Abu Dhabi.

Pakistan Petroleum (up 10.3%) that the drilling of two appraisal wells in offshore block 5 has been completed with results matching ADNOC's findings.

Currently, the company is drilling its first exploration well in the block and has submitted a field development plan, expected to be approved by December 2024.

Speculation about a significant policy rate cut by the State Bank of Pakistan (SBP) next week and a surge in SBP reserves to $11.2 billion further fueled the bullish activity on the Pakistan Stock Exchange (PSX).

KSE-100 index gained 1,893.09 points or 2.13% to close at 90,859.85 points.

India’s BSE 100 Index lost 0.44% or 113.33 points to close at 25,674.59 points.

The Dubai Financial Market (DFM) General Index gained 0.66% or 30.32 points to close at 4,621.37 points.

Commodities

Oil prices surged on Friday supported by geopolitical tensions, with concerns that Iran may plan a strike on Israel. Israeli intelligence suggests Iran could launch an attack with drones and missiles before the US presidential election on November 5, according to Reuters.

The OPEC+ coalition may delay its planned production increase for December due to weak oil demand and rising supply. They initially aimed to increase output by 180,000 barrels per day, but this was previously delayed from October.

Brent crude prices surged 1.77% to $74.1 per barrel.

Gold prices recovered some losses on Friday due to uncertainties around the US presidential election and Middle East tensions, making gold more appealing as a safe-haven asset. However, rising US Treasury bond yields and a stronger US Dollar could pressure gold prices.

International gold prices increased 0.37% reaching $2,752.7 per ounce. In Pakistan, gold prices dropped by PKR 2,500 to PKR 284,700/tola on Friday.

Currency

US dollar weakened against PKR, down 0.04% in the inter-bank market. Pakistani currency settled at 277.7, a gain of 15 paisas against the US dollar. In the open market USD was trading at PKR 280.0.