Pakistani financial markets had a mixed day on Wednesday with robust investor appetite for short-term government debt contrasting sharply with a steep fall in domestic gold prices.

But the government failed to meet its target of Rs800 billion as it managed to raise Rs680 billion through an auction of Market Treasury Bills, despite receiving bids worth Rs2.77 trillion. The State Bank of Pakistan accepted papers across four maturities at a weighted average yield of 11.60% with demand heavily concentrated on shorter tenor bills.

The one-month T-bill received bids worth Rs1.17 trillion against a target of Rs100 billion and the SBP accepted Rs124 billion. The three-month paper garnered Rs388 billion against the target of Rs200 billion raising Rs459 billion.

Longer maturities were relatively softer on demand. The central bank received Rs121 billion against the Rs200 billion six-month target and only Rs48 billion against the Rs300 billion 12-month target, against bids of Rs432 billion and Rs711 billion respectively.

Yields moved in different directions. The one-month cut-off slipped eight basis points to 11.39%, and the three-month yield declined five basis points to 11.60%. The six-month yield was up 10 basis points at 11.90 percent while the 12-month rate was unchanged at 11.99 percent.

The rupee, meanwhile, edged up to close at 277.45 against the dollar compared with 277.46 on Tuesday.

Gold, however, saw a sharp correction. The price of 24-karat gold fell Rs11,300 to Rs454,036 per tola, while international spot gold rebounded roughly 1 percent to $4,373 an ounce.

Markets are now looking toward the US non-farm payrolls report due on Friday and next week's US CPI. The two data points could shape expectations for Federal Reserve policy and be the catalyst for gold's next big move.

Credit: Independent News Pakistan (INP)