Stocks fluctuate, gold rises to over 2-week high
The Index opened at 42,676.83 points today.
KARACHI (Dunya News) – The Pakistan Stock Exchange (PSX) on Monday has been reflecting fluctuations – as mostly foreign investors remained wary of the virus outbreak in China and possible spread in many other countries, together with some local investors confidence after Pakistan’s beneficial tour of the World Economic Forum (WEF) last week to bring leading firms’ attention for possible contribution in the country’s economy.
The benchmark KSE 100-share Index gained 99.76 points or 0.23 percent, and reached 42,732.78 points as of 10.04am. At 01.04pm, stocks slipped to 42,506.02 after losing 127 points or 0.3 percent.
The Index opened at 42,676.83 points today. The Index closed at 42,633.02 points on Friday after obtaining 126.08 points.
These reports have been supported with Financial Action Task Force (FATF) Working Group’s satisfaction over the country’s performance in measures implemented to curb money laundering and terror financing.
Previously, the stocks were affected by political uncertainty that marred the overall trading environment while kept investors’ sentiment subdued.
The signing of a phase one trade deal between the U.S. and China to ease the ongoing trade war restored a bit of confidence among the investors. Domestic politics and rising reservations against the ruling party by its allies were also noticed by the investors.
Traders had opined that the market was still in search of a direction, which could be provided by the State Bank monetary policy and the herald of corporate results reporting season next week.
Traders were of the view that after a major run-up since August last year, the index was consolidating at the current levels before moving forward. “Early trade has been witnessing much of the volatility and the index has been fluctuating from negatives to positives and vice-versa.”
The emerging disapproval from Pakistan Tehreek-e-Insaf (PTI) allies over its policies contributed to the slow pace as the disagreements between the PTI government and its allies are being taken as a “sign of a brewing political crisis.”
Two weeks ago, the market witnessed massive overall spike in the stocks as local and foreign investors rampaged across the market to quickly hit upper circuits after the war clouds hanging over the region due to US-Iran hostilities dissipated which provided the investors the much-needed comfort to move funds from gold and money market back to risky assets that may provide higher returns.
Earlier, investors’ optimism continued as they saw the market back in the green after two earlier dismal years of negative returns.
From Aug 16, 2019 when the benchmark index had hit the pit at 28,765 points, the market has witnessed a spectacular rally that has carried it up by more than 50pc in fewer than five months.
Improvement on the external front together with stability in the Pakistani Rupee was expected to reassure foreign investors.
Meanwhile, inflationary readings are set to touch peak in January 2020 (this month) with an imminent interest rate cut to follow, domestic investors remain jubilant as well, he said.
Gold rises to over 2-week high
Gold prices climbed to a more than two-week high on Monday as rising concerns over the spread of a virus outbreak in China and its potential economic impact prompted investors to buy the safe-haven metal.
Spot gold rose to its highest since Jan. 8 at $1,586.42 and was up 0.6% at $1,579.94 per ounce by 0131 GMT. U.S. gold futures advanced 0.5% to $1,579.50.
The new coronavirus in China has killed 81 and infected more than 2,700, as residents of Hubei province, where the disease originated, were banned from entering Hong Kong amid global efforts to halt the rapid spread of the outbreak.
Asian stocks slipped as investors remained wary of the virus outbreak in China, while the yen jumped.
The coronavirus transmission ability is getting stronger and infections could continue to rise, China’s National Health Commission said on Sunday, and the country might extend Lunar New Year holidays due to the virus outbreak.
Investors are also keeping a close eye on the U.S. Federal Reserve’s first meeting of the year scheduled on Jan. 28-29.
Physical gold demand was subdued in major Asian hubs last week on account of the Lunar New Year holidays, with growing fears the virus outbreak in China could further dampen activity.
Palladium dipped 1.7% to $2,385.85 an ounce. Silver jumped 0.9% to $18.24, while platinum fell 0.4% to $997.25.
