Stocks tick up on E&Ps, banks in timid trade

Stocks on Monday managed to remain afloat on buoyancy provided by energy and banking shares amid sentiments that were a mix of caution and concern ahead of budget and fears that a steep rise in COVID-19 cases may lead to lockdown tightening, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index put on 0.27 percent or 90.74 points to close at 34,021.97 points and its KSE-30 shares index secured 0.76 percent or 112.54 points to end at 14,855.65 points level.

Saad Rafi, head of equity sales at Al Habib Markets, said, “The market ended positive as an appreciation in crude oil prices helped build a rally in the E&P (exploration and production) sector”.

Rafi said banks also gathered some momentum on back of undervalued shares and on inflation numbers.

Inflation rate for the month of May stood at 8.2 percent, bit lower than the market average of 8.5 percent, hinting that there was no room for further easing of benchmark interest rate, which sparked a rally in banking sector, he said.

Of 354 active scrips, 141 advanced, 195 weakened, and 18 ended neutral, while volumes shrank to 198.095 million shares, as compared to 233.020 million in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The trend was mixed as a rise in novel coronavirus cases worried investors as it was already hurting the economy”.

Ahmed said the State Bank of Pakistan’s expressing grave concern in a podcast about the lockdown and the COVID-19’s economic impact sent negative signals.

Investors were anxiously waiting for the announcement of federal budget and the measures to be introduced to support the capital market and industry as well as the incentives to be offered to boost economic activities in the country, Ahmad added.

Analyst Ahsan Mehanti from Arif Habib Corporation said, “Stocks closed higher in the prebudget rally at PSX, led by banking and energy stocks on strong valuations”.

Upbeat data on CPI Inflation at 8.22 percent for May, robust fertiliser sales in April, expected Rs216 billion subsidy for power sector and finance minister’s affirmations over no new taxes in the federal budget FY21 helped the market stay afloat, Mehanti added.

Ovais Ahsan, chief executive officer of Optimus Capital, said, “The market saw range-bound activity as investors chose to be cautious ahead of the federal budget expected on June 12”.

Ahsan said the banking sector was the biggest contributor to the index, as investors built their positions expecting the cycle of rate cuts was likely coming to an end.

The oil and gas sector exploration sector also saw buying interest on the back of rising international crude oil prices as the global economies were reopening, he added.

The top gainers were Colgate Palmolive, up Rs49 to close at Rs2,249/share, and Abbott Laboratories, gaining Rs20.83 to finish at Rs519.79/share, while Rafhan Maize, down Rs174 to close at Rs7,025/share, and Nestle Pakistan, losing Rs120 to close at Rs6,753.33/share, were the main losers.

Pakistan Elektron came out with the highest volumes with 22.743 million shares and gained Rs1.1 to end at Rs24.36/share, whereas Oil & Gas Development Company had the leanest turnover with 4.021 million shares, but it strengthened by Rs2.43 to end at Rs117.03/share.