Pakistan stocks surge to record highs; Indian and Dubai stocks track gains on Wall Street

Pakistan stocks rose to record high on Friday, and expected to rise more as the lucrative returns have attracted foreign investors, who have purchase more in 2024 than ever in the past decade. Pakistani rupee also closed a 4-month high against dollar while local gold prices also made a record.

Analysts say Pakistan was still offer cheaper valuations for foreign investors, and those investments would continue, more so after the Fed cut.

That said, the rally faces risks going forward. Pakistan was downgraded to a frontier market status from secondary emerging market by FTSE Russell in July, with the decision coming into effect from Sept. 23. Vanguard Group Inc., which provides investment management and advisory services, is cumulatively holding as much as $160 million worth of Pakistan stocks, and is expected to trim holdings.

Friday saw heavy trade on the back to the FTSE rebalancing. With a large chunk of foreign supply taken out of the market coinciding with the market closing at new all-time highs the coming weeks should see upside acceleration.

Driven by fertilizer and energy shares, the KSE-100 index gained 0.76% or 615.16 points to close at an all-time high of 82,074.44 points.

Indian stocks soared to new highs on Friday, buoyed by overnight gains on Wall Street. Stocks in the automobile, banking, FMCG, metal, realty, healthcare, and consumer durables sectors saw strong demand.

Investors anticipated increased fund inflows into Indian equities from institutional buyers, following the significant interest rate cut by the Federal Reserve on Wednesday and indications of further rate reductions in the coming months.

India’s BSE 100 Index gained 1.52% or 409.68 points to close at 27,281.57 points.

The Dubai Financial Market (DFM) General Index gained 0.34% or 14.85 points to close at 4,436.37 points.

Commodities

Oil prices eased on Friday, but are on track to register gains for a second straight week following a large cut in US interest rates and declining global stockpiles

Crude declined due to weak demand expectation in China and falling crude oil import in the United States. Crude prices are also being impacted by rising tensions in the Middle East after walkies talkies exploded in Lebanon.

Brent crude prices fell 0.64% to $74.40 per barrel.

Gold price gained on Friday and advanced to a fresh record high, beyond the $2,600 mark. The Federal Reserve's oversized interest rate cut on Wednesday was accompanied by a projection for another 50 basis points fall in borrowing costs by the end of this year.

The outlook keeps a lid on the recent recovery in the US Treasury bond yields, which is seen undermining the US Dollar (USD) and benefiting the non-yielding yellow metal.

International gold prices gained 1.16% reaching $2,617.5 per ounce. In Pakistan, gold prices soared by PKR 3,500 to PKR 272,000/tola on Friday.

Currency

US dollar eased further against PKR, down 0.03% in the inter-bank market. Pakistani currency settled at 277.83, a gain of 08 paisas against the US dollar. In the open market USD was trading at PKR 280.