Stocks lose 80 points on weaker rupee
The Pakistani stock market closes lower due to concerns about the weak rupee and a bleak economic outlook, despite some support from MSCI raising Pakistan's weight in its Frontier Markets Index.
Posted 8/26/2023, 1:35:37 AM
dawn.com
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The Pakistani rupee has hit a historic low against the US dollar due to increased demand for the dollar following eased import restrictions and political uncertainty ahead of the general elections.
Pakistan's rupee dropped to a record low due to the easing of import restrictions, which has increased demand for the dollar.
The U.S. stock market closed lower as an earlier rally driven by Nvidia's earnings report fizzled out, while treasury yields increased, and the S&P 500 is on track to end its five-month winning streak, with concerns over the Federal Reserve Chair Jerome Powell's speech at Jackson Hole weighing on investors.
The Pakistani rupee weakened further against the US dollar in the interbank market due to higher demand and uncertainty, while the open market remained stable; however, insiders noted that currency dealers were selling the dollar at higher rates in the open market.
Most stock markets in the Gulf ended lower due to a slightly hawkish outlook from the US Federal Reserve, with Abu Dhabi, Qatar, and Saudi Arabia experiencing declines.
The Pakistani rupee has fallen below 300 to a US dollar due to factors such as the rise of the dollar, uncertainty surrounding general elections, and a political/judicial/constitutional crisis, resulting in eroded business confidence, increased inflation, and reduced industrial output.
The Pakistani stock market experienced significant losses in response to rumors of an interest rate hike, economic uncertainty, and the depreciation of the rupee.
The Pakistani rupee is expected to trade within a narrow range against the dollar in the upcoming week following its recent sharp depreciation, although some analysts anticipate continued pressure on the currency due to capital withdrawals, political unrest, and economic uncertainty.
Most stock markets in the Gulf ended lower as investors grew cautious due to volatile oil prices and awaited monetary policy decisions by the US Federal Reserve.
Gold prices in Pakistan continued to decline for the fourth consecutive day, in line with international rates, as the domestic price of 24 karat gold fell by Rs5,800 per tola and Rs4,972 per 10 grammes to settle at Rs216,500 and Rs185,614 respectively, while the price of silver 24 karat dropped by Rs50 per tola and Rs42.87 per 10 grammes to settle at Rs2,650 and Rs2,271.94 respectively; meanwhile, the rupee gained Rs2.03 against the US dollar in the interbank trading, closing at Rs304.94.
Stocks opened lower on Wall Street as investors awaited Apple's fall event and key inflation data, with tech stocks leading the retreat while rising oil prices added to worries about inflation resistance.
Stock indices closed lower today, with the Nasdaq 100, S&P 500, and Dow Jones Industrial Average all experiencing declines, while the technology sector was the session's laggard and the real estate sector was the leader but still lost ground. Additionally, the U.S. 10-Year Treasury yield and Two-Year Treasury yield both increased.
Stocks closed lower on Tuesday due to uncertainty surrounding the Federal Reserve's future policy plans, as rising oil prices and concerns about inflation and interest rates weighed on investor sentiment. The Fed's decision on interest rates is expected to remain unchanged, but there is uncertainty about their next steps.
U.S. stock markets closed lower amid risk-off sentiment as the Federal Reserve began its two-day monetary policy meeting, while Asian markets, including Japan's Nikkei 225 and Australia's S&P/ASX 200, experienced declines; however, European markets, including Germany's DAX and the U.K.'s FTSE 100, traded higher.