PSX surges in cyclical stocks rally; earnings optimism

Stocks rallied to end over one percent higher on Friday, powered by a recovery in cyclical sector’s shares as investors digested hot weekly inflation data and a mixed bag of quarterly results.

The Pakistan Stock Exchange's (PSX) benchmark KSE 100-share Index gained 670.87 points or 1.62 percent to close at 42,096.24 points. The highest index of the day remained at 42,167.48 points while the lowest level of the day was recorded at 41,425.37 points.

KSE-30 index also increased by 222.68 points or 1.42 percent to close at 15,882.78 points.

Traded shares rose by 131 million shares to 406.680 million shares from 275.431 million shares. The trading value increased to Rs11.636 billion from Rs7.904 billion. Market capital expanded to Rs7.047 trillion from Rs6.960 trillion. Out of 345 companies active in the session, 264 closed in green, 58 in red while 23 remained unchanged.

Analyst Ali Najib at Topline Securities said equities witnessed positive momentum on the back of an easing off in global energy prices where international oil and coal prices saw some correction.

“The aforesaid decline assisted the market to continue yesterday’s buying sentiment by putting cyclical sector’s stock on the investors’ radar.”

Banks, cement and OMC sector stocks contributed positively to the index where UBL, HBL, LUCK, PSO and MLCF added 199 points, cumulatively. On the flip side, MARI, EFERT and POL witnessed some profit taking as they lost 21 points collectively.

Arif Habib Ltd in its post market report said bulls triumphed in the trading session at the PSX. “In the first trading session, benchmark index remained in the green zone as value buying was witnessed across the board,” it said. “In the second session, investors gained confidence due to positive news flows regarding the IMF program resumption as rupee further appreciated against the dollar.”

Additionally, the announcement of the positive results triggered investor participation. Refinery and cement sectors remained in the limelight.

The highest increase was recorded in shares of Allawasaya Tex, which rose by Rs271.95 to Rs3,898.45 per share, followed by Nestle Pakistan XD, which increased by Rs190.10 to Rs6,185 per share.

A significant decline was noted in shares of Bata (Pak), which fell by Rs154.89 to Rs1,945.11 per share, followed by Sanofi-Aventis, which decreased by Rs50 to Rs1,220 per share.

Analyst Ahsan Mehanti at Arif Habib Corp said bullish trend witnessed on the strong rupee and easing trade deficit on reduced imports.

“Strong financial results in the cement sector and reports of army chief’s discussion on IMF deal with UAE and Saudi Arabia and speculations over the release of IMF bailout funds this month played major role in the bullish activity,” he added.

Cnergyico PK remained the volume leader with 64.344 million shares that increased by 51 paisas to Rs5.51 per share. It was followed by Pak Refinery with 29.939 million shares that closed higher by Rs1.17 to Rs18.01 per share.

Other stocks that recorded significant turnover included WorldCall Telecom, TPL Properties, Pak Elektron, Waves Singer, Cordoba Logist, Flying Cement, Telecard Limited and Unity Foods Ltd.

Shares’ turnover in the future contracts increased to 110.913 million shares from 74.556 million shares.