Stocks cheer easing world energy prices

Stocks rebounded on Thursday as retreating global oil and gas prices eased inflation fears following Russia’s offer to calm volatile energy market, with cement stealing the show on coal rout, dealers said.

The KSE-100 Shares Index, the main gauge of Pakistan’s capital market, gained 213 points or 0.5 percent to close at 44,586 points at the Pakistan Stock Exchange (PSX).

Volumes increased 17 percent to 296 million shares from 252.7 million on Wednesday. Average traded value also inched up by 4 percent to reach $61.2 million as against $59 million day-on-day. Topline Securities in a post market note said equities celebrated a diminishing trend in global energy prices soon after Russia announced its willingness to stabilise global energy market by exporting more gas to European region. The market opened with a positive gap of 172 point (+0.4 percent) and it an intraday high of 44,947 points, up 574 points or 1.29 percent, where investors kicked off profit taking, the brokerage said. Emerging as the major index supporters, TRG, CHCC, HBL, MLCF, and KTML cumulatively added 130 points, while COLG, ENGRO, POL, LUCK, and EPCL together eroded 57 points, being major laggards of the day, the brokerage said.

On corporate financial results front, TELE announced EPS (earning per share) of Rs1.69 for FY21 along with a 5 percent bonus.

It must be noted that lower-than-anticipated flows from Russia have been a major cause of the energy crisis, according to European energy officials. But Russia’s Gazprom PJSC will send more gas via Ukraine than it’s contracted to this year, based on the first nine months of supply, Russian president said Wednesday at an energy meeting in Moscow. Brokerage Arif Habib Ltd in its market review said the drop in coal prices primarily reversed the selling tide in cement sector today, which led the Index from the front.

Similarly, the overnight dent in international oil prices caused downward pressure in exploration and production stocks, the brokerage said adding the positive stride in index also propelled steel sector and investors considered taking positions.

The report further said cement sector stole the limelight, with MLCF garnering the most volume (besides hitting upper circuit) among Cement sector stocks, followed by DGKC.

However, selling pressure ensued, which brought the stock price of MLCF down from upper circuit by the end of session, it added. Besides cement, banks and refinery sector stocks also remained investors’ preference.

Sectors contributing to the performance included cement (+101 points), banks (+65 points), technology (+36 points), textile (+23 points), and chemical (-21 points).

Among scrips, WTL led the volumes with 57.5 million shares, followed by TELE 36.9 million, and TREET that posted a trade of 12.8 million shares.

As major turnover-makers WTL, TELE, TREET, UNITY and JSCL, formed 44 percent of the total trade volume. Positive contributors included TRG (+40 points), CHCC (+26 points), HBL (+23 points), MLCF (+22 points), and KTML (+20 points). Major laggards were COLG (-17 points), ENGRO (-11 points), POL (-10 points), LUCK (-10 points), and EPCL (-8 points).

Moreover, State Bank of Pakistan has sharply cut the amount of dollars individuals could buy specially for travelling to Afghanistan, amid concerns over outflows of foreign currency accelerating after the takeover of Taliban in the neighboring country.

"In order to enhance transparency in the foreign currency transactions by exchange companies and to curb undesirable outflow of cash foreign currency, the SBP has introduced regulatory measures," the central bank said in a statement. Analysts say the move will help stabilise rupee-dollar parity to some extent.