Pakistan stocks surge driven by strong valuations

The Pakistan Stock Exchange (PSX) closed on a positive note Tuesday, with stocks gaining momentum gradually throughout the day.

The market's movements remained within a narrow range of 1,200 points, indicating low volatility.

Blue-chip stocks led the bullish rally during the earning season, driven by strong valuations. The easing of political tensions, higher global crude oil prices, and speculations over the State Bank of Pakistan's (SBP) policy announcements played a key role in the market's positive close.

Commercial banks, technology & communication, and cement sectors were the major contributors in today's session, cumulatively adding 371 points to the index.

KSE-100 index gained 0.5% or 574.11 points to close at 114,804.17 points.

Indian stocks closed positive on Tuesday. Market experts noted that the broader market, which was considered overpriced, is now correcting. Large-cap stocks are also seeing mean reversion.

Factors contributing to the correction include a strengthening dollar, rising 10-year US bond yields above 4.7%, and uncertainty surrounding Donald Trump's actions post-January 20.

BSE-100 index gained 0.75% or 180.35 points to close at 24,311.95 points.

DFM General Index gained 0.25% or 13.05 points to close at 5,245.55 points.

Commodities

Oil prices stopped rising on Tuesday but stayed close to their highest levels in four months. People are watching to see how new U.S. sanctions on Russian oil exports will affect buyers in India and China.

There's also uncertainty about how much oil China will need, which might reduce the impact of the lower supply. Official data showed that in 2024, China's oil imports dropped for the first time in 20 years, except during the COVID-19 pandemic.

Brent crude prices shed 0.57% to $80.55 per barrel.

Gold's price has stabilized after a sluggish Monday, when concerns over Federal Reserve policy rates weighed on sentiment.

The mood is now improving on news that the President-elect Donald Trump's administration is considering a very gradual implementation of tariff plans.

International gold prices increased 0.28% reaching $2,667.32 per ounce.

Currency

US dollar eased against PKR in the inter-bank market. Pakistani currency shed 5 paisas to 278.72. In the open market USD was trading at PKR 280.