Stocks surge 2.5 percent on earnings optimism

Stocks surged 2.5 percent on Wednesday, supported by strong corporate earnings outlook while investor optimism also spurred by key sales data of retailers, dealers said.

Analyst Ahsan Mehanti at Arif Habib Corp said bullish activity witnessed at the Pakistan Stock Exchange (PSX) on institutional interest in scrips across the board on strong earnings outlook. 

“Oil stocks outperformed on strong financial results and payouts,” Mehanti said.

Upbeat data on oil, auto and fertilizers sales for the month of August helped the investor interest while HBL settlement for New York operations supported banking sector.  The benchmark KSE 100-share Index gained 2.5 percent or 1,030.82 points to close at 42,310.12 points. The highest index of the day remained at 41,411.73 points while the lowest level of the day was recorded at 41,024.54 points. KSE-30 Index also increased 0.69 percent or 144.68 points to close 21,107.78 points. Turnover surged by 74 million shares to 173.81 million shares. Trading value also increased to Rs9.66 billion from Rs5.40 billion while market capital expanded to Rs8.83 trillion from Rs8.65 trillion. Out of 285 companies’ active in the session, 285 closed in green, 82 in red while 21 remained unchanged.

  Elixir Securities in a post market note said equities surged on buying primarily in blue-chip shares, reportedly led by institutions despite recent concerns on macros and domestic politics. 

“We see current momentum to push market to test 43,000 points. However, strong resistance and profit booking will likely keep upside in check as domestic politics and macro concerns remain a dampener,” it said.

Index heavy oil stocks charged ahead in early trade with Oil and Gas Development Company Limited (OGDCL) briefly hitting upper price limit during last minutes of trading. 

Moreover, banks witnessed considerable interest and helped benchmark cross 1,000-point positive mark with National Bank of Pakistan (up 3.8 percent) testing upper price limit.  Other notable gainers included Engro Corp (up 4.5 percent), Pakistan State Oil (up 3.9 percent) and Lucky Cement (up 2.6 percent).

Highest increase was recorded in shares of Bata (Pak), which rose by Rs120 to Rs2,980/share, followed by Nestle Pakistan XD that increased Rs114 to Rs12,300/share. Major decline was noted in shares of Atlas Battery XD, which fell Rs36.94 to Rs710.06/share, followed by Hinopak Motor that decreased Rs20.25 to Rs1,079.75/share.

Significant turnover was recorded in stocks of Azgard Nine, TRG Pak Ltd, Bank of Punjab, Aisha Steel Mill, K-Electric Ltd, Pak Elektron XD, Dewan Motors, Power Cement, Engro Polymer and Oil and Gas Development Company Limited.

Azgard Nine remained the volume leader with 22.07 million shares. Its price fell 22 paisas to close at Rs13.39/share. It was followed by TRG Pak Ltd with 11.09 million shares and an increase of Rs1.27 to Rs38.78/ share.  Shares’ turnover in the future contracts rose to 44.03 million shares from 28.32 million shares traded in the previous session.