Pakistan stocks surge to a new all-time high

The week kicked off with a bang as Pakistan stocks surged to a new record high as oil prices keep on climbing.

Major contributors to the index gains included OGDC (+7.66%), PPL (+6.82%), and FFC (+2.53%). Higher oil prices result in increased margins for E&P companies.

PPL announced that its subsidiary, PPL Asia E&P B.V., has reached a mutually favorable settlement with Iraq’s Midland Oil Company. Under the agreement, Midland Oil Company will pay USD 6 million to PPL Asia via a third party.

Recent financial reports from OGDC and PPL indicate a significant improvement in gas sales collections, attributed to the timely revision of consumer gas prices. This boost in gas revenue is expected to maintain a strong liquidity position for both companies.

The KSE-100 index gained 1.65% or 1,378.34 points to close at 84,910.30 points.

Indian stocks continued their downward trend on Monday, pressured by significant sell-offs in key stocks.

This slump occurred amidst a backdrop of mixed global market signals and foreign fund withdrawals.

Additionally, geopolitical tensions and the exit poll results from state elections contributed to the market’s poor performance.

Despite the current challenges, experts remain hopeful about the market’s medium to long-term outlook, citing India’s robust economic growth and substantial domestic investor participation.

India’s BSE 100 Index shed 1.13% or 298.09 points to close at 26,191.74 points.

The Dubai Financial Market (DFM) General Index shed 0.25% or 10.80 points to close at 4,395.05 points.

Commodities

Oil prices continued to rise on Monday, fueled by concerns over a broader Middle East conflict and potential disruptions to exports from this key oil-producing region.

Brent crude increased by over 8% last week, while WTI surged by 9.1%, amid fears that Israel might target Iranian oil infrastructure following Iran’s missile attack on Israel on October 1.

Additionally, OPEC and its allies, including Russia, collectively known as OPEC+, plan to increase production starting in December after years of cuts aimed at supporting prices due to weak global demand.

Brent crude prices surged 2.34% to $79.88 per barrel.

Gold surged on Monday. The increase can be attributed to several factors: the Federal Reserve’s reduction in interest rates, renewed investor interest, and ongoing conflicts in the Middle East. Gold is often viewed as a safe-haven investment, particularly during times of geopolitical instability.

Current conflicts, such as the war in Ukraine and tensions in the Middle East, have driven investors towards safe-haven assets like gold.

International gold prices increased 0.27% reaching $2,657.99 per ounce. In Pakistan, gold prices increased by PKR 200 to PKR 275,700/tola on Monday.

Currency

US dollar gained ground against PKR, up 0.04% in the inter-bank market. Pakistani currency settled at 277.51, a loss of 13 paisas against the US dollar. In the open market USD was trading at PKR 280.