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November 25, 2020

Pandemic panic interrupts energy rally at PSX

Business

November 25, 2020

Stocks on Tuesday were lifted by energy sector that latched onto a global crude oil rally; however, a worsening virus situation kept the trade in a tight range, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.58 percent or 230.84 points to close at 39,863.36 points, while volumes decreased to 174.718 million shares, compared to 195.467 million on Monday.

Topline Securities in a review said, equities witnessed a choppy session where benchmark index surpassed the psychological level of 40,000 points to hit an intra-day high of 40,021pts after which some profit-taking dragged down to an intra-day low of 39,631 points.

“Higher international oil prices buoyed sentiment, while the lockdowns announced by the government kept the gains in check,” the brokerage added.

Tracking the benchmark, KSE-30 shares index also hit a high of 0.35 percent or 58.20 points to end at 16,751.65 points level.

A A Soomro, managing director at KASB Securities, said equity market remained wobbly where trading remained in a tight range, while volume was also thin as total value traded hovered around $42 million owing to a surge in second wave cases, touching 3,000 mark daily.

“A minor pull-back was witnessed in the last hour of trading after rupee gained some ground against dollar. And value buyers jumped the bandwagon,” he said, adding, “Attractive valuations are however keeping investors interest alive.”

Muhammad Saeed Khalid, head of research at Shajar Capital, said uncertainty gripped the market after the announcement of monetary policy statement.

He said the index performed mainly on oil scrips as crude prices surged later last night post an attack of the Houthis on Jeddah Aramco supply site.

"We have also noticed performance in the pharmaceutical sector where most of the companies drew strength betting on COVID-19 vaccine efficacy and availability,” Khalid added.

Trading activity was recorded in 377 active scrips, of which 211 gained, 137 lost, and 29 remained unchanged.

Faisal Shaji, strategist at Standard Capital, said, “There is lack of active participation in market where volumes remained sparse”.

“Despite interest rate hold and overall improved economic outlook, participants aren't coming in, while certain incidents in Middle East are also being closely watched by investors alike,” Shaji added.

Analyst Ahsan Mehanti from Arif Habib Corporation said, stocks closed bullish led by cement, banking and oil scrips as investor weighed SBP’s monetary policy status quo, projections of 1.5 percent to 2.5 percent growth in FY21, positive results from coronavirus vaccines and strong foreign direct investment numbers in July-October 2020.

“Higher global crude oil prices, upbeat home remittances in October, strong LSMI output, surge in textile exports for July-September period led the rally,” Mehanti added.

Top gainers were Mari Petroleum, up Rs28.81 to close at Rs1,306.14/share, and Sunrays Textile, up Rs25.98 to finish at Rs376.99/share.

Nestle Pakistan, down Rs50 to close at Rs6,500/share, and Rafhan Maize, down Rs50 to close at Rs8,400/share, were the main losers.

Unity Foods Limited led volumes with 19,008 million shares and it was up Rs0.46 to end at Rs23.58/share. Agha Steel Industries’ turnover was lowest with 3.571 million and it gained Rs0.15 to end at Rs31.42/share.