PSX grabs more gains as investors test risk-on mode

Stocks on Tuesday built on yesterday’s rally led by banks, fertilisers, and energy shares as smooth sailing of Finance Bill 2020 through lower house despite political noise, heartened investors to book fresh deals in some key names, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 0.70 percent or 240.12 points to close at 34,421.92 points, while KSE-30 followed suit with a high of 0.74 percent or 109.64 points to end at 14,862.25 points.

Analyst Ahsan Mehanti from Arif Habib Corporations said, “Stocks closes bullish on institutional buying at year-end close led by banking, fertilisers, and energy stocks”.

Mehanti added that investor weighed undisrupted trading amid a terror attack at PSX and approval of finance bill 2020 by the lower house.

“Easing economic uncertainty amid approval of $500 million World Bank assistance under RISE program and $1.3 billion China banking loan disbursements, surging banking spreads, higher fertiliser prices, and expectations for resolution of circular debt issue led to a bullish close,” Mehanti added.

Of 369 active scrips, 171 went up, 179 retreated, and 19 remained unchanged. The ready market volumes stood at 223.313 million shares, compared to 156.920 million in the previous session. Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said, “The passing of federal budget, expectation that IMF would approve second installment and arrival of loan from Chinese Banks helped the market close on a positive note”.

However, some triggers were needed to back these developments, because in the past on several occasions, whenever the market tried to cross 34,400 level, it was hit by selling and profit-taking, erasing gains, Ahmad added.

Zia Shaafi, senior investment adviser at Intermarket Securities, said, “Our stance on the market has been positive and this trend is likely to continue this week as expected as at present we are not foreseeing any negativity”.

Federal Budget had been passed and several incentives were announced for specific sectors so from here “we suggest buying on dips and with coronavirus cases moved down across the global, we hope trade activity to resume, helping improving business climate in the country,” Shaafi added.

Fahad Rauf, deputy head at Ismail Iqbal Securities, said, “Pakistan equities remained positive, sustaining momentum in line with global equities”. Banks, fertilisers, and pharmas lead the index gains, adding 170 points, Rauf said.

Taimoor Asif, senior analyst at Next Capital, said, Pakistan equities rejoiced the approval of finance bill and continued their upward momentum”.

Baking sector remained in the limelight on the back of attractive valuations, whereas cement succumbed to selling pressure despite further reduction in federal excise duty, Asif added.

The top gainers were Nestle Pakistan, gaining Rs235 to close at Rs6,735/share, and Sapphire Textile, up Rs56.94 to finish at Rs816.18/share, while Indus Dyeing, down Rs47 to close at Rs580/share, and Faisal Spinning, losing Rs19 to close at Rs251/share, were the main losers.

Pakistan Refinery posted the highest volumes with 40.003 million shares, but lost Rs0.34 to end at Rs0.17/share.

HBL Growth Fund’s turnover was the lowest with 4.465 million shares, whereas the scrip lost Rs0.35 to end at Rs7.50/share.