Auto rally drives stocks higher

Stocks moved ahead on Friday after auto sector rallied on expectations of a surge in car sales down the road amid promising economic outlook, dealers said.

Pakistan Stock Exchange’s (PSX) KSE-100 Shares Index gained 0.25 percent or 118.17 points to close at 48,211.70 points. Volumes were nearly flat at 867.3 million shares compared with the turnover of 889.93 million shares in the last trading session.

Brokerage Arif Habib Limited in a research note said the market maintained the positive momentum driven mainly by auto sector.

Automobile sector outperformed betting on expectations of an increase in the number of sales, the brokerage said. Cement and steel sector stocks rallied as well, the brokerage said adding that exploration and production, oil and gas marketing, and fertiliser stocks also supported the uptrend. Arif Habib Ltd report further said technology sector saw NETSOL performing well, whereas other tech stocks bore selling pressure.

KSE-30 Shares Index gained 0.1 percent or 19.04 points to close at 19,654.6g points.

Maaz Mulla at JS Global Capital said whispers regarding Rs5-10/bag increase in the price of cement spurred a rally in cement sector.

He said the energy sector also managed to close in the green zone as crude oil prices continued to edge higher in the international market.

“Going forward, we recommend investors to avail any dips in cement and steel sectors,” Mulla said.

As many as 422 scrips were active of which 248 advanced, 150 retreated and 23 remained unchanged.

Topline Securities in its daily market review said a positive session was observed at the local bourse.

Major contribution to the index came from United Bank, Bank Alfalah, GlaxoSmithKline, Honda Cars, and Mari Petroleum, as they cumulatively added 79 points to the index, the brokerage said.

In his market review, Ahsan Mehanti at Arif Habib Corp said stocks closed higher after reports of Rs8.0 trillion federal budget outlay for FY22 with Rs 900 billion PSDP (Public Sector Development Programme) commitments and record surge in global crude oil prices. He said however midsession pressure remained on concerns for rupee instability and higher inflation in May 2021.

Record $16.1 billion foreign exchange reserves were one of the top reasons for Friday’s bullish close, Mehanti added.

KASB Securities in a note said Pakistan's automobile industry witnessed a significant growth because of new entrants in the market and a rebound in economic activity.

“Automobile industry has seen sales recover at an extraordinary pace and sales are up by 54 percent year-on-year already whereas tractor sales are up by 62 percent year-on-year.”

“With further economic recovery expected in the coming months … the OMCs business paints a healthy picture,” the KASB report said.

Stocks that turned out the best gainers included Sanofi Aventis, up Rs41.76 to close at Rs965.72/share, and Siemens Pakistan, up Rs40.95 to close at Rs587.054/share.

Companies that suffered highest losses were Wyeth Pakistan, down Rs213.38 to close at Rs2,631.77/share, and Island Textiles that lost Rs179.99 to end at Rs2,220.01/share.

Highest volumes were witnessed in Worldcall Telecom with a turnover of 89.04 million shares. The scrip shed 5 paisas to close at Rs3.51 share. Hascol Petroleum was second with a turnover of 78.89 million shares. It gained 86 paisas to close at Rs11.91/share. Byco Petroleum was third with a turnover of 54.69 million shares. It gained 27 paisas to finish at Rs11.44.