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Stocks fired up as oil-fueled rally enters third session

Business

July 2, 2020

Stocks were fired up on Wednesday with energies-fueled rally entering third session, drawing sentimental strength from foreign assistance inflows, achievement of the revenue collection target, and inflation numbers in line with market expectations, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.36 percent or 467.49 points to close at 34,889.41 points level. KSE-30 shares index followed suit with a high of 1.75 percent or 259.50 points to end at 15,121.75 points level.

A report of Topline Securities, said, “The market opened on a positive as investors cheered the foreign reserve inflows”.

The brokerage said institutions, after being restricted from investing in national saving scheme, were likely to focus their investment towards equities.

“Cement sector was the major gainer in trading session as cement prices in north region went up by Rs15/bag couple of days ago,” the Topline report added.

Of 378 active scrips, 242 finished higher, 114 lower, while 22 ended neutral.

The ready market volumes stood at 315.039 million shares, as compared to 223.313 million in the previous session.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The arrival of $3 billion in just over a week from multilateral donor agencies to compensate the cost of COVID-19-led economic inertia and to support balance of payment situation”.

Moreover, the index consolidated and gained after a sharp increase in crude oil prices and the government’s achieving tax target, set for the current fiscal year of Rs3.9 trillion, Ahmad added.

Shahab Farooq, director research at Next Capital, said, “The market witnessed healthy activity with energy and cyclical sectors out-performing the general market”.

Banks, on the other hand, turned out to be the laggards during the session, Farooq added.

Fahad Rauf, deputy director Ismail Iqbal Securities, said, “Equities continued to sustain momentum as June 2020 inflation clocked in at 8.6 percent in line with expectations”.

Moreover, he added that FBR was able to collect Rs3,974 billion in taxes during FY20 surpassing the target by Rs66 billion.

Cements remained in limelight today due to sudden increase in prices, Rauf said.

“Index heavy weights, cements, E&Ps (exploration and production), and power lead the index gains, adding 387 points,” Rauf added.

A leading analyst said the inflation numbers were in line with street expectation, so keeping in view of the State Bank of Pakistan stance since March, there was a possibility of another rate cut.

The top gainers were Rafhan Maize, up Rs75 to close at Rs7,100/share, and Sapphire Textile, up Rs61.21 to finish at Rs877.39/share, while Nestle Pakistan, down Rs38.75 to close at Rs6696.25/share, and Hinopak Motor, losing Rs23 to close at Rs350/share, emerged as the main losers.

K-Electric Limited posted the highest volumes with 39.105 million shares and gained Rs0.27 to end at Rs3.28/share, while Agritech Limited’s turnover was the lowest with 6.764 million shares and it gained Rs0.18 to end at Rs4.86/share.