Auto rally drives stocks; IMF loan revival cheered

Stocks stayed in top gear on Tuesday in record trade, driven mostly by autos, amid hopes Pakistan’s reentering the IMF programme will pave wave for fresh foreign investment, dealers said.

KSE-100 shares index gained 0.69 percent or 316.62 points to close at 45,922.04 points at Pakistan Stock Exchange (PSX). Volumes increased to 825.893 million shares, from 588.039 million shares on Tuesday. KSE-30 rose 0.61 percent or 116.08 points to end at 19,212.13 points level.

Topline Securities in a note said investor interest was witnessed in the auto sector after PAMA announced monthly sales numbers for the month of December.

Consequently, MTL closed the day at 1161.05 (up 4.02 percent) owing to a sales growth of 28 percent on month on month basis, while GHNL finished at its upper circuit amid a 75 percent MoM growth in its truck segment sales as per the PAMA data, the brokerage said.

Furthermore, The E&P sector also witnessed bullish momentum owing to an increase in international oil prices, which at the time of writing stood at USD 52.98 (WTI), the Topline report added.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities said good economic numbers and higher sales recorded in auto, cement, steel, and pharmaceutical groups revived confidence at the stock market helping index to finish near 2.8-year high.

Furthermore, index closed near 46,000 points with hefty volume hinting that interest from individuals and institutions boosted overall sentiment, he said.

“Hopes are high that index will cross 46,000 level on Wednesday,” Ahmad added.

Muhammad Abdur Rafay, research analyst at Pearl Securities, said Prime Minister unveiled first digital payment system, which triggered the interest in IT stocks, while auto sector also came in limelight as the car sales during the 1HFY21 showed a promising growth of 19 percent.

“We expect the market to witness profit-taking at higher levels, hence, we recommend investors to adopt the ‘sell on strength’ stance in the coming days,” Rafay added. Of 414 active scrips, 272 moved higher, 124 lower, and 18 stayed neutral.

Analyst Ahsan Mehanti from Arif Habib Corporation said stocks closed higher amid record trades led by scrips across the board as investors weighed surging global crude oil prices and upbeat data for auto sales growing by 18 percent YoY for July-December 2020.

Speculations ahead of financial results and payouts and likely resumption of $6 billion IMF bailout programme for pending fiscal support contributed to bullish close, Mehanti added.

Javed Vohara at Equity Sales Desk of BMA Capital Management said the market was likely to gain further given the increased local liquidity and indication from SBP for resumption of IMF programme.

Moreover, to play the momentum, commercial banks, cement and conglomerates should be accumulated on any minor dip given the attractive valuation, Vohara added.

Millat Tractors, up Rs43.96 to close at Rs1161.05/share, and Khyber Tobacco, strengthening by Rs34.03 to finish at Rs487.77/share, were the major gainers.

Nestle Pakistan, down Rs109.60 to close at Rs6,660.40/share, and Gatron Industries, losing Rs42.37 to close at Rs522.63/share, suffered highest losses in the day.

K-Electric Limited led the trade with 250.242 million shares, gaining Rs0.49 to end at Rs4.50/share. Pace Pakistan Limited posted the lowest turnover with 17.945 million shares, and rose Rs0.32 to end at Rs4.14/share.