KARACHI:

The Pakistan Stock Exchange (PSX) endured another volatile session on Tuesday, where the benchmark KSE-100 index shed 1,579 points, or 0.94%. After opening on a positive note, the index touched the intra-day high of 168,519, but selling pressure emerged immediately, dragging the market down.

The index hit the intra-day low of 165,997 towards the end of trading. Tuesday’s decline marked the second consecutive session of losses, following a 0.73% drop on Monday. Despite early optimism, investors remained cautious, leading to profit-taking in key sectors. The index appears to be in a consolidation phase, hovering around key support zones.

Arif Habib Limited (AHL) remarked that selling pressure persisted for the second session, when the KSE-100 traded down to Monday’s low of 166k. Some 26 shares rose while 73 fell with HBL (+3.56%), Engro Fertilisers (+1.54%) and Askari Bank (+3.85%) contributing the most to index gains. On the flip side, Hub Power (-3.75%), Engro Holdings (-2.7%) and Lucky Cement (-3.09%) were the biggest drags, it said.

Among economic news, AHL mentioned, the State Bank of Pakistan (SBP) governor sees inflation holding steady, although further interest rate cuts will depend on the impact of recent floods and the outcome of ongoing International Monetary Fund (IMF) review. For the index, 166k is emerging as a key level and it will need to immediately regain 167.2k to target the 170k mark, AHL added.

KTrade Securities, in its market wrap, noted that the PSX concluded another volatile session in negative territory as the benchmark KSE-100 index lost 1,579 points (-0.94%) to close at 166,174. The decline was driven by rising geopolitical tensions with India and ongoing economic concerns, particularly in the context of IMF review and fiscal scrutiny.

Heavyweight stocks from sectors such as power, energy, cement, fertiliser and oil & gas exploration were among the major contributors to the downside. Despite the market-wide sell-off, investor sentiment remained cautiously optimistic, with many participants staying engaged in anticipation of clarity on macroeconomic developments, KTrade said.

Topline Securities commented that following Monday’s downbeat momentum, bears kept their firm control in Tuesday’s session as well. The KSE-100 index opened on a positive note, with bulls charging ahead to push the market up by 766 points. However, the optimism was short-lived as selling pressure intensified midway through the day.

The index nosedived to the intra-day low of 1,755 points before eventually settling at 166,174, down 1,579 points. It attributed the negative close mainly to heavy profit-taking by local institutions, which overshadowed early gains and dragged the market into the red.

The decline was driven by losses in Hub Power, Engro Holdings, Lucky Cement, Mari Energies and UBL, which pulled the index down by 986 points. Partial support came from HBL, Engro Fertilisers, Askari Bank and Allied Bank, which contributed 380 points, Topline stated. JS Global analyst Mohammed Waqar Iqbal said that the benchmark index remained under pressure and faced volatility as profit-taking continued to impact the market.

Overall trading volumes slightly decreased to 1.266 billion shares from Monday’s tally of 1.274 billion. The value of shares traded stood at Rs54.2 billion. The PSX announced on X that on Tuesday, 54% of the total traded value was in Shariah-compliant stocks.

Shares of 487 companies were traded. Of these, 183 closed higher, 267 fell and 37 remained unchanged.

PTCL was the volume leader with trading in 180.6 million shares, falling Rs0.27 to close at Rs31.14. It was followed by The Bank of Punjab with 134.7 million shares, rising Rs0.62 to close at Rs35.08 and Cnergyico PK with 90.7 million shares, edging down Rs0.03 to close at Rs8.76. Foreign investors sold shares worth Rs614 million, the National Clearing Company reported.

KARACHI:

Gold prices in Pakistan rose on Tuesday, tracking gains in the international market, where US gold futures broke past the unprecedented $4,000 per ounce level for the first time.

The surge was driven by expectations of an upcoming Federal Reserve rate cut and sustained safe-haven demand amid the ongoing US government shutdown.

In the local bullion market, the price of gold per tola increased by Rs1,500 to reach Rs416,778, according to data released by the All Pakistan Sarafa Gems and Jewellers Association. Similarly, the rate for 10 grams rose by Rs1,286 to Rs357,319. On Monday, the price had already jumped by Rs5,400 per tola to Rs415,278.

US gold futures for December delivery settled 0.7% higher at $4,004.4, after hitting the high of $4,014.6, as per Reuters. Spot gold was up 0.6% to $3,985.82 per ounce as of 01:48 pm EDT (1748 GMT), after hitting an all-time high of $3,990.85 earlier in the session.

Interactive Commodities Director Adnan Agar said the current rally in gold was primarily being driven by futures activity rather than spot prices. In the futures market, it broke the $4,000 level.

Agar noted that despite the record-breaking rally, the market appeared “overstretched” and may be due for a correction. “I’ve been watching gold for 15 years and have never seen it this overbought. The rally is too strong, even bullish trends have limits,” he said.

Agar added that profit-taking was likely once investors began to view current price levels as unsustainable. “If something doubles or triples in price, that’s understandable. But when it goes up six or seven times, investors start locking in profits. We may soon see a selling phase once a trigger appears.”

However, with the US government partially shut down and key economic data releases delayed, there are currently few catalysts for a sell-off. He suggested that a potential resolution of the political standoff between the Democrats and Republicans could serve as a turning point. “A deal to end the shutdown will likely bring gold down,” he said.

Agar recalled that gold’s major rally began in 2023 amid the Israel-Palestine conflict, which spurred global safe-haven demand. “Now that peace talks are progressing, gold should ideally be cooling, but instead it’s being driven by FOMO – the fear of missing out,” he observed.

He cautioned that the international market remained heavily overbought, and a correction of at least $200 was “almost certain” once sentiment shifted. “If gold reaches $4,020 to $4,050 in the spot market, we could see a pullback. After that, prices may stabilise for a few months,” he said.

Despite short-term risks, major institutions remain optimistic in the long term. Goldman Sachs has projected that gold could reach $4,900 by December 2026. At the current pace, that looks aggressive, but their forecast is based on a year’s horizon, not three months, Agar said.

Meanwhile, the Pakistani rupee edged slightly higher against the US dollar, appreciating by 0.01% in the inter-bank market. By the day’s close, the local currency stood at 281.22 per dollar, marking a modest gain of three paisa from Monday’s close at 281.25.

Compensation payouts on around 14 million unfair motor finance deals could start next year, at an average of about £700 each, the Financial Conduct Authority (FCA) has said.

The regulator previously suggested motorists could receive less than £950 per deal, but it now suggests they could receive less compensation than previously estimated.

The redress scheme was previously estimated to cost lenders between £9bn and £18bn; it is now expected to cost lenders £8.2bn, based on about 85 per cent of eligible consumers taking part.

Motor finance firms broke the law or its rules by not properly informing customers about commission paid by lenders to the car dealers that sold them the loan, the regulator said. This meant that many motorists did not have the opportunity to negotiate or find a better deal and therefore may have paid a higher interest rate for their loan.

Nikhil Rathi, the FCA’s chief executive, said in a statement that it was time for customers to get fair compensation.

“Many motor finance lenders did not comply with the law or the rules,” Mr Rathi said. “Now we have legal clarity, it’s time their customers get fair compensation. Our scheme aims to be simple for people to use and lenders to implement.”

The FCA boss said that not everyone would get what they wanted following the ruling, as the regulator will work on the compensation scheme.

“We recognise that there will be a wide range of views on the scheme, its scope, timeframe and how compensation is calculated,” he said. “On such a complex issue, not everyone will get everything they would like.

“But we want to work together on the best possible scheme and draw a line under this issue quickly.

“That certainty is vital, so a trusted motor finance market can continue to serve millions of families every year.”

The FCA found that car buyers “may have been charged too much” by their lenders, meaning that anyone who bought their car before January 2021 using a car finance scheme could be eligible for compensation.

Some companies used “discretionary commission arrangements” with brokers, which gave them the power to adjust customers’ interest rates on Personal Contract Purchase and Hire Purchase agreements.

The watchdog, which looked into data from across some 32 million agreements made between 2007 and 2024, believes setting up a free compensation scheme will be easier and quicker for customers to access, and more cost-effective for firms by removing much of the legal and administrative work.

As up to 90 per cent of new cars purchased in the UK are bought using motor finance, it’s estimated that millions could potentially be due payouts following the ruling.

Because these brokers earned more commission on higher rates, this created an incentive to maximise the rate given. An estimated 40 per cent of car finance deals were thought to be affected by the issue.

The FCA outlawed this practice from 28 January 2021, but acknowledged that a “high number” of people have now come forward to claim they had been overcharged before the ban.