Pakistan stocks witness profit-taking following IMF’s loan approval

Pakistan Stocks closed lower on institutional profit-taking following approval of IMF’s $7 billion loan.

Market opened positive making intra-day highs, however investors opted for profit taking amid uncertainty over outcome of government’s tax reforms and challenges over ongoing political and institutional tensions.

Slump in global crude oil prices and concerns over surging power sector circular debt also kept investors on backfoot.

The KSE-100 index shed 0.72% or 589.95 points to close at 81,657.97 points.

Stock indices in India continued to march ahead, touching fresh highs for the fifth straight session on Thursday.

US Federal Reserve's monetary policy committee loosening interest rate by steep 50 basis points, in particular, has been lending fresh support to Indian stocks.

Loosening monetary policy in the US through rate cuts typically leads to a flight of capital to markets where policy rates are high. The steeper the rate cut in the US, the more the tendency to flight of capital to alternative investment destinations, including India.

India’s BSE 100 Index gained 0.77% or 212.84 points to close at 27,689.88 points.

The Dubai Financial Market (DFM) General Index gained 0.84% or 37.92 points to close at 4,526.61 points.

Commodities

Oil fell Thursday, feeling pressure after the Financial Times reported that Saudi Arabia was ready to abandon its $100-a-barrel price target as it prepares to increase production in a bid to take back market share.

Pressure was also tied to reports eastern and western factions in Libya have patched up disagreements over leadership of the nation’s central bank that had led to a sharp fall in crude output

Brent crude prices slipped 2.7% to $71.48 per barrel.

Gold prices steadied on Thursday, remaining close to record highs as focus turned to an upcoming address by Federal Reserve Chair Jerome Powell, while key US economic readings also loomed.

Metal markets were pressured by an overnight rebound in the dollar, as the greenback surged from over one-year lows amid persistent speculation over just how the Fed will reduce rates further after a 50 basis point cut last week.

International gold prices surged 0.98% reaching $2,683.11 per ounce. In Pakistan, gold prices increased by PKR 1,500 to PKR 277,000/tola on Thursday.

Currency

US dollar slipped against PKR in the inter-bank market. Pakistani currency settled at 277.68, a gain of 16 paisas against the US dollar. In the open market USD was trading at PKR 280.