Stocks rebound on institutional buying binge

Stocks on Monday surged from last week’s virus-led lows as institutions lifted heavyweights, with sentimental support coming from a downtick in new infections over the weekend, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 Shares Index gained 2.18 percent or 976.01 points to close at 45,682.77 points.

Volumes ballooned to 409.08 million shares from 240.48 million in the last trading session.

An analyst at Pearl Securities said despite the prevailing uncertainty regarding Covid cases and the related lock-down, stocks started the rollover week on a positive note primarily supported by the index heavyweights.

“Market rumors suggest heavy buying from a big pension fund and a likely rate cut to counter the negative impact on coronavirus,” the analyst added.

As many as 397 scrips were active of which 211 advanced, 170 declined, and 16 remained unchanged.

Ahsan Mehanti at Arif Habib Corp said stocks recovered sharply led by scrips across the board as investors weighed strong financial results in oil, banking, and fertiliser sectors.

Reports of over $1 billion receipts in Roshan Digital Accounts and higher global crude prices led the index to make gains in the earnings season, he added.

KSE-30 Shares Index also jumped 2.85 percent or by 520.83 points to close at 18,797.30 points.

A A H Soomro at KASB Securities said stocks had a great rally as several factors contributed to the bullishness. Decline in infection rate over the weekend, imposing of stricter lockdown measures by calling the Army for implementation and rumored extra funds with asset managers sparked an across the board rally, he said.

He added that therefore, the index witnessed positivity in heavy sectors including banks, oil exploration, cements, and technology.

Going forward the direction of the market would be set by Covid cases and the successful implementation of SOPs, he added.

“Otherwise, positivity would be shortlived as earnings season concludes this week. We expect flattish to positive trend for the week to continue as investors reassess their portfolios in response to earnings season,” Soomro said.

Brokerage Arif Habib Limited in a note said the market made a rebound with the anticipation of new fund injection by mutual funds, despite the persistent selling witnessed in the past couple of sessions owing to the scares of rising Covid cases.

Financial results announced earlier today failed to excite the market with the index tumbling 317 points earlier in the session. Aggressive buying was observed in Oil and Gas Development Company, Pakistan Petroleum Limited, and Pakistan State Oil, all of which hit upper circuits, the brokerage added.

Similarly, buying was observed in Habib Bank Limited and United Bank Limited, it said.

Abbot Laboratories, up Rs48.96 to close at Rs779.98/share, and Nestle Pakistan, up Rs40 to close at Rs5,750/share, were the top two gainers of the day.

Sapphire Textile, down Rs71.36 to close at Rs898.63/share, and Mehmood Textile, down Rs35.08 to end at Rs455/share, closed the day with worst losses.

Telecard Limited led volumes with a turnover of 55.04 million shares, trailed by TRG Pakistan with a turnover of 54.62 million shares, and Unity Foods posting a trade of 26.43 million shares.