Late buying lifts stocks after energy rout

Stocks on Wednesday crisscrossed the break-even line to settle higher on late value-buying after a crude oil rout had sent energy reeling, dealers said.

Topline Securities in a note said KSE-100 Shares Index, the benchmark of Pakistan Stock Exchange (PSX) closed positive for the second consecutive day of the rollover week, closing at 45,544 points, up 0.3 percent or 137 points.

“This is despite the decline in international markets and oil prices due to extended global lockdown.”

The index was range-bound from the word go, while recovery was seen in the latter half, the brokerage said.

Day-on-day ready market volume dropped 7 percent to 409.66 million shares, while traded value increased 16 percent to Rs25.6 billion.

KSE-30 shares index gained 0.27 percent or 50.99 points to close at 18,800.62 points.

Maaz Mulla at JS Global Capital said volatility remained the order of the early hours; however, later value buying pared some losses.

“On the news front, lockdowns in some cities are expected to remain in force till April 11 in view of rising coronavirus cases, which are a cause of investor concerns,” Mulla added.

As many as 399 scrips were active of which 208 advanced, 180 declined and 11 remained unchanged.

Arsalan Soomro at KASB Securities said stocks closed mildly positive as investors rejoiced over improvement in Pakistan-India ties after PM Modi mentioned desiring cordial relationship with Pakistan.

“Although, it's a long way to go; however, any signals of peace are reassuring for investors,” Soomro said.

Volumes stood at 409.68 million shares compared with the turnover of 440.98 million shares in the last trading session.

An analyst at Arif Habib Limited said the market traded in a tight band, oscillating between -148 points and +186 points.

The E&P (exploration and production) sector that had led the index the other day dragged the index down throughout the session owing to an overnight fall in world crude oil markets by 7 percent, the analyst said.

Refinery, technology, and chemical sectors on the other hand performed well with TRG Pakistan and Pakistan Telecommunication hitting upper circuits, while banking stocks remained mute but positive throughout the session, he added.

Cement sector closed higher with Pioneer Cement gaining 2.4 percent, Power Cement 1.9 percent, Maple Leaf Cement 2.1 percent, Cherat Cement 1.8 percent, and D.G Khan Cement ending 0.6 percent stronger.

The worst laggard was energy as Pakistan Petroleum Limited declined 0.9 percent, Oil and Gas Development Company 2.9 percent, and Pakistan Oilfields 1.2 percent in tandem with falling international crude oil prices.

As the market is expected to remain volatile due to rollover week, analysts recommend investors to buy value stocks on dips.

Ahsan Mehanti at Arif Habib Corp said stocks closed higher led by selected autos, banking, and cement scrips on strong valuations.

He said mid-session pressure remained in oil stocks on weak global crude oil prices and uncertainty in global equities.

However, easing political noise and rupee stability buoyed the index, Mehanti added.

The top two gainers were Colgate Palmolive that grabbed Rs86.2 to close at Rs2,837/share and Bata Pakistan, which grew Rs46 to close at Rs2,050/share.

Unilever Foods, losing Rs500 to close at Rs14,000/share, and Philip Morris Pakistan, shedding Rs58.5 to end at Rs1,050/share, were the worst losers of the day.

TRG Pakistan was the most traded scrip with 54.57 million shares, followed by Pak Telecommunication with 37.2 million shares, and Byco Petroleum whose 28.22 million shares changed hands on Wednesday.