Stocks rise 1.77 percent; oil shares lead gains on weak rupee

Stocks closed 1.77 percent up on Tuesday propelled by dollar hedged sectors those jumped on higher revenue prospects as the rupee fell to all time low of 115.5 during an intra-day trade, while a short-covering rally in financial shares also aided.

Mohammad Arbash at Elixir Securities said market opened on a positive note and started to rally during first hour of trading on reported depreciation of rupee against the greenback in inter-bank market, with PKR/USD parity reportedly crossing Rs116/USD intra-day.

“Among the key sectors, exploration and production, textiles and power that either have dollar-linked revenues or export sales rallied, while financials also closed higher on expectations of higher inflation, and interest rates.”

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.77 percent or 770.14 points to close at 44,309.74 points. KSE-30 shares index gained 2.18 percent or 473.77 points to close at 22,173.78 points. As many as 382 scrips were active of which 224 advanced, 140 declined and 18 remained unchanged.

The ready market volumes stood at 219.909 million shares as compared with the turnover of 115.968 million shares a day earlier.

Ahsan Mehanti at Arif Habib Corp said stocks closed sharply higher led by oil, banking and cement scrips after 5.0 percent rupee depreciation in interbank market, while pressure remained in auto sector on higher cost of imports.

“Likely surge in cement and textile exports supporting forex obligations invited investor interest. Positive impact of rupee fall on dollar denominated oil sales for the oil sector and surging global crude prices played a catalytic role in bullish close.”

Cements that stand to lose from rupee decline due to higher imported prices of coal, also closed in green zone, seeing good turnover amid news of third round of increase in retail prices in North.

On the flip side, auto assemblers and oil refineries succumbed to profit taking as sharp devaluation in Rupee hurts automobile demand and increases potential exchange losses for refineries.

Analysts expect more gains to follow through with rupee depreciation possibly facilitating fresh portfolio investments. Moreover, this also bodes well for the upcoming amnesty scheme, aimed at legalizing and channeling back offshore assets parked by Pakistanis.

Companies reflecting highest gains include Unilever Foods up Rs462.5 to close at Rs9,812.5/share and Service Industries up Rs36.26 to close at Rs776.26/share.

Companies reflecting most losses include Bata Pakistan down Rs150.23 to close at Rs2,854.37/share and Philip Morris Pakistan down Rs149.62 to end at Rs2,842.88/share.

Highest volumes were witnessed in Nimir Resins with a turnover of 15.21 million shares. The scrip gained 58 paisas to close at Rs11.69/share. TRG Pakistan was second with a turnover of 13.42 million shares. It gained Rs1.41 paisas to close at Rs36.81/share. Lotte Chemical was third with a turnover of 13.19 million shares. It shed 36 paisas to close at Rs10.09.