The Pakistan Stock Exchange (PSX) opened Tuesday’s trading session on a positive note, with the benchmark KSE-100 Index climbing more than 1,300 points.

The index surged to 164,368 points during early trading, reflecting a strong upward movement in the market.

In the previous session, the benchmark index had settled at 163,038 points.

The latest rally marks a positive start to the trading day, with the market gaining momentum after the previous session’s close.
 

The Japanese yen eased against the US dollar on Tuesday, further eroding last week’s safe-haven gains, underpinned by a risk-on mood and ​a weaker euro ahead of key central bank meetings this week that will influence the global rates outlook.

The yen ‌was 0.16% weaker at 157.73 per dollar, inching further away from the one-month high it touched last week ahead of the Bank of Japan policy decision later this week. The yen had lost ground on Monday too.

The BOJ is set to keep interest rates steady at 1.25% in a two-day meeting concluding on Friday, ​but signal its readiness to continue raising borrowing costs on mounting price pressures.

A key gauge of Japan’s service-sector inflation rose 3.7% ​in September from a year earlier, data showed on Tuesday, a sign of increasing price pressures that ⁠will likely keep the central bank on track for further interest rate hikes.

“We expect the BOJ will conclude that the underlying rate of ​consumer price inflation is at a level generally consistent with the 2% price stability target,” analysts at MUFG said in a note.

However, simply ​touching the target once is not enough, the analysts said, adding that the BOJ will now shift from a focus on the downside risks to inflation to a stance of monitoring risks in both directions.

The yen was among the best-performing major currencies last week, as AI jitters in the equity market spurred a ​haven rush into the currency.

Markets price slightly better-than-even odds of a December BOJ hike, so there is plenty of room for a ​rebound in the yen should Governor Ueda strike a hawkish note, said Ebury analysts in a note.

“We still favour another hike at the last meeting of ‌the ⁠year, though whether the BOJ will be prepared to commit to that just yet is unclear.”

Apart from the BOJ, four other major central banks will announce policy decisions this week. The BOJ’s meeting follows that of the Fed, which is seen skipping a hike at its two-day meeting concluding on Wednesday.

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The European Central Bank is also set to keep rates unchanged at 2.5% on Thursday. New Zealand’s and Canada’s central ​banks are expected to raise rates ​this week.

DOLLAR FIRMS ON RISK-APPETITE ⁠REVIVAL

The dollar index held steady near a one-week high on Tuesday at 102.04 as a tech-led rebound on Wall Street revived appetite for risk, while investors await megacap earnings and the US midterm elections.

Risk ​appetite returned overnight after Anthropic’s IPO filing and Meta’s (META.O), opens new tab $95 billion equity plan rekindled the artificial intelligence trade.

The ​dollar was also ⁠underpinned by a weaker euro , which fell to a near two-week low against the greenback as worries over France’s fiscal health piled pressure on the single currency. The euro last fetched $1.1165, down about 1.4% this month.

A selloff in French government bonds that drove the country’s debt-risk premium to ⁠its highest ​since the 2011 sovereign debt crisis has rekindled concerns about financial stress across the ​euro zone.

The Brazilian real stabilised after it fell sharply against the US dollar after President Luiz Inacio Lula da Silva won a historic fourth term on Sunday against Senator Flavio ​Bolsonaro, the eldest son of former President Jair Bolsonaro. 

Pakistan is the only major cotton-producing country to have had such a dramatic loss and its production has fallen by more than 60% in the past decade, said Ehsanul Haq, chairman of the Cotton Ginners Forum.

Haq added in a statement that lax enforcement of agricultural zoning laws, too much sugarcane planting in designated cotton-growing areas and setting up of new sugar mills were the main causes for the fall.

He urged on enforcement of crop zoning restrictions and preventing sugarcane cultivation in cotton belts to bring back local cotton production. He added after efficient execution of the zoning laws, enhancements should be made to cotton research stations and other supporting measures.

Haq further demanded to provide a legal structure to the planned Pakistan Cotton Board under the leadership of All Pakistan Textile Mills Association (APTMA. He advocated that the Pakistan Central Cotton Committee (PCCC) and its subordinate institutions should be placed under the proposed board.

The reduction in domestic cotton production and quality has created a crisis in the local cotton sector, making Pakistan more dependent on imported cotton and edible oil, putting more pressure on foreign exchange reserves, Haq said.

He claimed the government has failed to come up with a viable strategy to reverse the drop despite a high-level meeting chaired by the Deputy Prime Minister Ishaq Dar approximately a year ago, which decided to establish a cotton board under the direction of APTMA.

Signs have emerged that the decision has started to be implemented after a year of delay, he said.

The proposed board could include representatives of the Pakistan Cotton Ginners Association (PCGA), the Karachi Cotton Association (KCA), the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the National Textile Education Council, private seed companies and concerned government institutions.

Haq also called upon the federal and provincial governments to focus the enforcement of crop zoning restrictions and improve the Pakistan Meteorological Department so that it could deliver prompt and accurate weather forecasts to farmers.

“Cotton prices came under pressure last week due to financial difficulties in the sector, limited buying by textile mills, imports of yarn and fabric under the Export Facilitation Scheme and government inspections of cotton ginning factories,” he said.

Cotton prices fell to Rs18,500 from Rs18,500 per maund, a drop of Rs200, Haq said.

He also expressed concern over the reports of financial scandals involving billions of rupees in the yarn market of Faisalabad and millions of rupees in several cotton ginning facilities in Sindh, saying these developments have added to the uncertainty across the sector.