Stocks rally on strong growth data

Stocks started the week on a positive note as the government expects 3.94 percent growth for FY21 owing to the massive recovery in industrial activities, dealers said.

Ahsan Mehanti at Arif Habib Corp said stocks closed higher amid higher trades as investors weighed strong estimated growth of 3.94 percent in FY21 and surging global crude oil prices.

“Likely status quo in the upcoming monetary policy announcement this week and Finance Ministry outlook on 5.0 percent growth in FY22 and 6-7 percent on sustained basis played a catalytic role in bullish close,” Mehanti added.

Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index gained 0.40 percent or 182.13 points to close at 46,097.11 points. KSE-30 shares index gained 0.33 percent or 61.36 points to close at 18,780.51 points.

As many as 408 scrips were active of which 242 advanced, 149 declined and 17 remained unchanged. The ready market volumes stood at 766.64 million shares compared with the turnover of 710.42 million shares in the last trading session.

An analyst at Pearl Securities said Moody’s stated that the credit profile of Pakistan reflects the country’s economic strength, which was supported by the long-term GDP growth potential. “However, profit-taking was observed during the trading session as the Sindh government decided to continue the ongoing lockdown restrictions for another two weeks,” they added.

Neelam Naz at JS Global Capital said KSE-100 traded in green territory throughout the day. “The rollover week started off on a positive note, which gained the confidence of the investors. On the news front, Federal Energy Minister Hammad Azhar’s statement on Saturday that the government is targeting four percent economic growth for ongoing fiscal year also helped boost the market sentiments.”

An analyst at Arif Habib Limited said market posted decent gains earlier in the session by adding a total of 400 points, taking cue from Moody’s assessment of Pakistan’s credit reporting which was supported by a surprise growth in real GDP.

Although the roll-over week began, unlike past months, activity remained low in tech stocks and in the end TRG Pakistan closed below last closing price. Exploration and production (E&P) stocks remained poised on increase in crude oil prices, whereby Oil and Gas Development Company (OGDC) scored high volumes with an increased stock price, but failed to retain the gains by the end of session. Cement sector bounced back on the prospects of an impending increase in cement price.

Going forward, analysts expect the market to remain volatile during this week and recommend investors to avail any downside in the coming sessions as a buying opportunity. Companies reflecting highest gains included Colgate Palmolive, up Rs135 to close at Rs2,994/share, and Wyeth Pakistan, up Rs119.64 to close at Rs1,714.96/share.

Companies reflecting most losses included Unilever Foods, down Rs207.94 to close at Rs15,671.96/share, and Bata Pakistan, down Rs122.94 to end at Rs1,627.06/share. Highest volumes were witnessed in Worldcall Telecom with a turnover of 275.88 million shares. The scrip gained 26 paisas to close at Rs2.14 share.

Silk Bank was second with a turnover of 36.61 million shares. It gained six paisas to close at Rs1.45/share. Summit Bank was third with a turnover of 36.49 million shares. It gained 37 paisas to finish at Rs2.96.