Pakistan stocks surge in line with global equities and commodities

Pakistan's stock market rallied on Tuesday, buoyed by positive economic developments, including a bull run in international equities and IMF’s nod to borrow from domestic banks to address the circular debt in the power sector.

Moreover, the International Monetary Fund (IMF) easing tax collection targets for the fiscal year 2025 to PKR 12.37 trillion also played role in driving the market to a bullish close.

According to an analyst from Topline Securities, Tuesday's trading session was dominated by bullish sentiment, largely fueled by encouraging economic news.

Reports indicated that the IMF had allowed Pakistan to borrow PKR 1.25 trillion ($4.5 billion) from domestic banks to address the PKR 2.4 trillion circular debt in the power sector without escalating public debt levels.

Investor confidence received a further boost as the IMF provided a draft of the Memorandum of Economic and Financial Policies (MEFP) to Pakistani officials. The development marked significant progress toward a staff-level agreement under the $7 billion Extended Fund Facility (EFF), bolstering hopes for continued financial support and stability.

An analyst at Ismail Iqbal Securities highlighted that the benchmark index closed positively, reflecting optimism about the anticipated agreement. Key sectors, including fertilizer, power generation and distribution, and technology and communication, were the major contributors to the market's upward momentum, collectively adding 324 points to the index.

KSE-100 index gained 0.69% or 801.5 points to close at 117,001.09 points.

US dollar steadied against PKR in the inter-bank market. Pakistani currency shed 10 paisas to close at 280.27. In the open market USD was trading at PKR 282.

Indian Stocks

The Indian stock market surged on Tuesday, driven by strong global cues and confidence in the US Federal Reserve's interest rate stance.

However, optimism was subdued by concerns over rising trade war tensions after new tariffs from US President Donald Trump.

BSE-100 index gained 1.67% or 390.94 points to close at 23,845.74 points.

DFM General Index gained 0.59% or 30.50 points to close at 5,140.90 points.

Commodities

Oil prices rose after Israel attacked Gaza, breaking a ceasefire agreement. Earlier in the week, U.S. strikes on Yemen added to the tensions, showing how unstable the world's top oil-producing region is.

On top of this, news from China also pushed oil prices higher, as the government introduced new policies to boost consumer spending, including raising salaries and offering childcare subsidies.

Brent crude prices increased by 1.52% to $72.15 per barrel.

Gold surged on Tuesday, anticipating the upcoming US Federal Reserve meeting on Wednesday. Internationally, gold prices soared past the critical $3,000 mark for the second time in a week, driven by investor concerns over economic uncertainties stemming from U.S. President Donald Trump's tariff policies.

International gold prices gained 0.88% to close at $ 3,024.45 per ounce.