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March 3, 2021

Stocks vault on tame CPI, easing political noise


March 3, 2021

Stocks on Tuesday hooked onto a global rally, with gains pouring in from all sides, mostly because of tame inflation numbers and easing uncertainties over Senate elections, dealers said.

Pakistan stock exchange’s (PSX) KSE-100 shares index gained 0.81 percent or 370.84 points to close at 45,964.27 points, while volumes ticked up to 399.187 million shares from 368.389 million on Monday.

Topline Securities in a report noted the index regained the 46,000 points’ psychological level amid lackluster trading.

A lower than expected Consumer Price Index (CPI) inflation number of 8.7 percent for February 2021 buoyed sentiment, while uncertainty over senate elections due Wednesday kept the market in check, the brokerage said.

The brokerage further noted that automobiles saw renewed buying interest with the sector closing 2.2 percent higher, while the engineering stocks gained 3.15 percent.

As many as 417 scrips were active on Tuesday of which 274 advanced, 125 declined and 18 remained unchanged.

Ahsan Mehanti at Arif Habib Corp said stocks showed recovery led by scrips across the board on bull-run in global equities and crude oil markets.

The $550 million record receipts in Roshan Digital Accounts, rupee recovery, upbeat data on oil, cement, fertilisers and auto sales in January fired up the index.

KSE-30 shares index also gained 0.94 percent or 179.9 points to close at 19,235.79 points.

An analyst at Arif Habib Limited said market bounced back ahead of Senate elections, which was critically for the incumbent government.

He said post announcement of majority of the financial results for the outgoing quarter, investors were mostly booking profits on long-held positions.

However, the prospects of release of funds on account of circular debt resolution prompted investors to take positions in energy chain, whereas buying was also

observed in banks, steel, refinery and textile sectors,” the analyst said.

Mixed sentiment was seen in the cement sector where Lucky Cement shed 1.1 percent, Kohat Cement declined 1.1 percent, and Fauji Cement closed 1.1 percent in the red zone, while Cherat Cement (CHCC) gained 1.62 percent.

Furthermore, Shell Pakistan lost 0.2 percent after reporting a loss of Rs45.05/share for 2020.

In the pharmaceutical sector, Searle Pakistan gained 7.5 percent closing at its upper circuit as it announced earning per share of Rs51.12 with a cash payout of Rs20/share.

“Moving forward, we expect the market to remain volatile and recommend investors to remain cautious ahead of senate elections,” Danish Ladhani at JS Global Capital said.

Any downside should be viewed as an opportunity to build positions in the cement, refinery and textile sectors, Lakhani added.

Island Textile, grabbing Rs135 to close at Rs1,940/share, and Bata Pakistan, securing Rs95.87 to close at Rs1,935.87/share, ended up as the top two gainers of the day.

Wyeth Pakistan, shedding Rs49.60 to close at Rs935.4/share, and Gatron Industries, giving up Rs44.24 to end at Rs545.75/share, suffered highest losses in the day.

TRG Pakistan was on top of volume chart with 38.33 million shares. The scrip gained Rs6.12 to close at Rs147.61/share. It was followed by Azgard Nine that saw a trade of 31.31 million shares and gained Rs1.45 to close at Rs32.88/share. Aisha Steel Mill was third with a turnover of 29.53 million shares. It grew by Rs1.67 to finish at Rs25.45.