Stocks rally as energy leads in volatile trade

Stocks mostly rallied on Monday led by energy in a volatile session owing to mixed sentiments, dealers said.

Topline Securities said KSE-100 Shares Index opened the week with a 500+ points rally to settle the day at 45,407, up 1.13 percent or 506.2 points.

“The rally was primarily driven by oil stocks that rose on hopes the payment to the IPPs, which was due this month is imminent,” the brokerage said.

This, it said, was expected to improve liquidity condition of the energy change including E&Ps, OMCs & IPPs. Volumes ticked down to 440.98 million shares compared to 484.63 million in the last trading session.

Ahsan Mehanti at Arif Habib Corp said stocks closed bullish led by selected scrips as investors weighed easing political noise and higher global crude oil prices. Rupee recovery, large-scale manufacturing growth, and speculations over positive outcome of circular debt management plan kept PSX gaining, Mehanti added.

KSE-30 shares index gained 1.48 percent or 272.96 points to close at 18,749.63 points. As many as 404 scrips were active of which 175 advanced, 213 declined and 16 remained unchanged.

An analyst at Pearl Securities said a rumours were circulating that power companies were likely to receive the first tranche of receivables, which triggered hefty buying in the oil and gas sector.

“Moreover, the Ministry of Energy is preparing a new policy for oil marketers and refiners, which also increased interest in the sector," the analyst added. Brokerage Arif Habib Limited noted market went down earlier in the session by 165 points that saw across the board mild selling pressure.

“Short roll-over week and an outstanding amount of Rs38.8 billion at the start of the week caused some jitters. However, a reversal in energy chain stocks saw a rebound in the index with a total increase of 564 points and closing the session 465 points up,” the brokerage said.

Dealers said anticipation of resolution of gas related circular debt helped energy chain to recover primarily. Arsalan Soomro at KASB Securities said stocks started flattish to negative as investors remained jittery after the news of PM contracting Covid became public.

“Refineries continued upward momentum on expectations of new refinery policy. However, the sector of the day was energy, which witnessed strong bullish trend as expectations of IPPs payments this week,” Soomro said. Packages announced strong earnings along with dividend and Pak Suzuki turned into profit with sharp improvement in the gross margins, keeping the stock price upwards.

Going forward, analysts feel market would remain choppy. However, news of IPPs payments can keep the relevant sector in the green, thereby supporting the overall Index.

Unilever Foods, up Rs300 to close at Rs14,500/share, and Nestle Pakistan up Rs93.45 to close at Rs5,948.45/share, were the best gainers of the day. Worst losses were suffered by Bata Pakistan, down Rs49 to close at Rs2,004/share, and Philip Morris Pakistan, down Rs47.06 to end at Rs1,108.5/share.

Byco Petroleum led volumes chart with 68.67 million shares. The scrip gained 10 paisas to close at Rs11.14/share. Pak Refinery was second with a trade of 40.9 million shares. It gained Rs1.26 to close at Rs26.57/share. Hascol Petrol was third with a turnover of 38.58 million shares. It gained Rs1.0 to finish at Rs11.48.