Stocks on Tuesday were fired up by power and energy stocks as investors pinned hopes on the resolution of issues plaguing the power sector amid reviving economic activities and increasing oil demand, dealers said.
Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.61 percent or 644.39 points to close at 40,559.15 points, whereas its KSE-30 index followed suit with a high of 2 percent or 345.40 points to end at 17,607.03 points.
Tahir Abbas, director research at Arif Habib Limited, said the market comfortably maintained upward journey beyond 40,000 points, while the government’s decision to end lockdown would lead to opening of the economy thereby increasing the demand of food products, finished items and fast moving of economic cycle”.
Fresh buying was witnessed in power-related stocks owing to government’s decision to resolve outstanding issues which would have a chain-impact not only on the power sector but also on the energy related companies, Abbas added.
Of 416 active scrips, 254 rose, 139 retreated, and 23 remained unchanged. Volumes stood at 600.041 million shares, as compared to 576.547 million shares in the previous session.
Fahad Rauf, deputy head of research at Ismail Iqbal Securities, said equities gained momentum after recent breather due to the end of the lockdown and Moody's rating affirmation.
“Energy stocks remained in the limelight on news flow that government has worked out a plan to resolve outstanding issues of the power sector,” said Rauf adding that other Asian markets also advanced due to drop in COVID hospitalisations.
“The two key data releases in near term would be remittances and auto sales for July 2020, which would guide sentiment in the trading sessions down the line, while upcoming MSCI review would also bring specific stocks in limelight,” Rauf said.
Zia Shafi, senior investment advisor at Intermarket Securities said the long term strategy should be ‘sell on any rise’ as there was a possibility that several scrips that rose sharply in the recent rally might see some correction, so investors should prefer booking profits on every available gain.
Muhammad Saeed Khalid, head of research Shajar Capital said the market cheered the approval for power sector tariff as power sector robustly surged by approximately 7 percent during the day.
“Further, oil scrips remained bullish on the expected renewal of $3.8 billion oil facility contract from Saudi Arabia.”
However, on the contrary, investors booked gains in the automobile assemblers ahead of the release of sales numbers, mainly on the government’s move to restrict more vehicle bookings for new government officials, Khalid said.
The top gainers were Unilever Foods, gaining Rs590 to close at Rs9,590/share, and Island Textile, up Rs67.92 to finish at Rs989.25/share, while Nestle Pakistan, down Rs40.40 to close at Rs6302.75/share, and Colgate Palmolive, shedding Rs34.75 to close at Rs2340.00/share, were the main losers.
Hascol Petrol led volumes with 65.446 million shares, gaining Rs1.11 to end at Rs15.99/share, while Pakistan Refinery’s turnover was the lowest with 16.517 million shares, but the scrip grew stronger by Rs1.03 to end at Rs14.85/share.