Stocks end higher on bargain hunting

Stocks ended higher on Tuesday, recovering from a steep fall a day earlier, as oil prices rebounded after Russia signalled possible cooperation with OPEC on output cut, dealers said.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 1.72 percent or 636.80 points to close at 37,695.75 points. KSE-30 shares index followed suit with a high of 1.59 percent or 265.87 points to end at 16,952.55 points level.

Of 358 active scrips, 225 up, 114 retreated, and 19 remained unchanged. The ready market volumes stood at 274.483 million shares, as compared with the turnover of 307.960 million shares in the previous session.

“The market, tracking regional peers, came back strongly and a bounce back in global crude prices also helped local oil energy firms,” said Muhammad Ovais Ahsan, CEO, Optimus Capital Management.

“Sentiment remained positive as bulls pinned hopes on a rate cut of 50 to 100bps in the upcoming monetary policy due on March 17.”

Brent futures rose 10 percent by 1041 GMT, a day after it slumped 25 percent as Saudi Arabia slashed crude prices for April and planned output hikes after Russia refused to support deeper oil production cuts.

Reuters reported that the Russian Energy Ministry has called a meeting with oil companies on Wednesday to discuss future cooperation with the OPEC. Dealers said energy sector firms, however, continue to face brunt of lower oil prices as the sector closed -3.24 percent lower.

Cement sector on the other hand continue to garner investor interest, as they factor in decline in policy rate and possibly increased demand (increased fiscal space due to lower oil prices) moving forward.

Salman Ahmad, head of institutional sales at Aba Ali Habib said the market has been on highly oversold zone and “need some development on economic scenario to gear up”.

“Recovery in crude oil prices after Monday’s slumped also encouraged fresh buying in heavy weight scrips, mainly in oil and gas exploration sector.” Monday’s decline was mostly due to hefty decline in crude oil prices which resulted in global stock market fallout. “Recovery in crude oil prices and Asian markets helped stabilisation in our market as well,” Salman added.

Sateesh Balani, director research at Ismail Iqbal Securities said local equities rebounded sharply mainly led by cyclicals and financial stocks. Moreover trading activity also remained upbeat where E&Ps remain under pressure but rebounded from their lows in the second half of the session, Sateesh added.

The top gainers were Colgate Palmolive, up Rs155.99 close at Rs2387.99/share, and Phillip Morris Pakistan Rs88.97 to finish at Rs2037.95/share.

Unilever Foods down Rs190.00 to close at Rs7210.00/share, and Sapphire Fiber down Rs50.12 to close at Rs711.00/share, were the main losers. Maple Leaf recorded the highest volumes with a turnover of 27.881 million shares.

Whereas the scrip gained Rs0.76 end at Rs30.74/share. The lowest volumes were witnessed in Hascol Petrol recording a turnover of 6.757 million shares, whereas the scrip gained Rs0.25 to end at Rs19.30/share.