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Stocks gain as FATF expresses satisfaction over Pakistan’s performance
A sign of the Pakistan Stock Exchange is seen on its building in Karachi, Pakistan January 11, 2016. REUTERS/Akhtar Soomro/File Photo

Stocks gain as FATF expresses satisfaction over Pakistan’s performance

KARACHI: Positive sentiments have been prevailing among investors on Thursday as reflected by the Pakistan Stock Exchange (PSX) after reports emerged that the Financial Action Task Force’s (FATF) Working Group has expressed satisfaction over the country’s performance in measures implemented to curb money laundering and terror financing.

The benchmark KSE 100-share Index gained 235.68 points or 0.55 percent, and recovered to 42,796.95 points as of 11.29am. The Index opened at 42,646.20 points today.

Yesterday, the Index closed at 42,561.27 after losing 65.20 points. A total of 177,984,850 shares were traded with combined value of Rs9.289 billion.

In the previous week, the market closed at 43,167.77 points, while observing fluctuations in the whole week, and closed in a little bit of negative territory amid political uncertainty that marred the overall trading environment while kept investors’ sentiment subdued.

Earlier, 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 steady as coronavirus epidemic mount

Internationally, gold prices held steady as rising fears over the spread of China’s new flu-like virus supported the safe-haven metal.

Spot gold was flat at $1,558.93 per ounce by 0127 GMT. U.S. gold futures rose 0.3% at $1,561.00.

In other precious metals, palladium advanced 1.1% to $2,499.44 an ounce, silver remained unchanged at $17.82 per ounce and platinum edged lower by 0.1% to $1,011.15.

Asian shares fell over the virus scare, while the yen rose.

European Central Bank President Christine Lagarde is set to launch a broad review of its policy on Thursday that is likely to see her redefine the ECB’s main goal and how to achieve it.

On the Brexit front, Britain moved a step closer to its Jan. 31 exit from the European Union when the legislation required to ratify its deal with Brussels passed its final stage in parliament on Wednesday.

Gold production in Russia rose 16.2% in the first 11 months of 2019 to 337.26 tonnes from 290.3 tonnes in the same period a year earlier, Russia’s finance ministry said on Wednesday.