Oversold stocks turn the tide at PSX

Stocks on Tuesday carried off a smashing comeback, thanks to oversold stocks, betting on Pakistan's reentry into International Monetary Fund (IMF) loan and strong quarterly earnings, traders said.

Pakistan Stock Exchange's (PSX) benchmark KSE-100 Share Index jumped 457.17 points or 1.02 percent to 45,274.93 points. During the session the index went as high as 45,294.37 points and as low as 44,747.11 points.

Ahsan Mehanti, an analyst at Arif Habib Corp, said, stocks closed sharply higher ahead of quarter-end earnings season led by oversold scrips across the board on strong earnings outlook.

Surging global crude oil prices, foreign inflows, likely government approval of Rs130 billion IPPs payments easing circular debt this week, and speculations ahead of IMF review next week for release of $1 billion under extended fund facility led to bullish close, Mehanti added.

KSE-30 Shares Index also rose 195.07 points or 1.11 percent to 17,837.24 points against 17,642.17 points.

Traded shares increased 63 million to 364.86 million shares from 301.39 million shares. The trading value swelled to Rs14.02 billion from Rs11.17 billion. Market capital grew to Rs7.82 trillion from Rs7.77 trillion. Out of 556 actives in the session, 408 advanced, 127 retreated, while 21 were neutral. Brokerage Arif Habib Ltd said initially the market traded in narrow range, oscillating between -71pts and +120pts, but gathered pace by the end of session and closing it on a high note.

Indus Motor CoXD got away with the highest gains, up by Rs26.86 to close at Rs1,162.86 per share, followed by Abbott Laboratories, up Rs26.16 to end at Rs781.83 per share.

Being the top loser, Unilever Foods fell Rs1,165 to Rs19,000 per share, followed by Colgate PalmXDXB that shed Rs140 to finish at Rs2,340 per share.

Haris S Khan, an analyst at Topline Securities, said, the rally could be attributed to expectations of a successful sixth and seventh review of the $6 billion IMF loan programme, while media reports further suggested Finance Minister Shaukat Tarin was also assured of Pakistan’s commitment to the IMF programme.

The technology and textile sector also came in the limelight as rupee touched 170 against dollar in the day’s trade. The technology sector rose by 4.29 percent on an average with TRG and SYS adding 152 points cumulatively to the benchmark index. Moreover, MEBL, POL, and UNITY together added 92 points to the index.

On the results front, OGDC announced its FY21 EPS of Rs21.28 along with a cash dividend of Rs1.5/share, closing at Rs83.39, down 1.45 percent. PIOC also announced its FY21 EPS of Rs8.69 after which the stock closed at Rs89.81, down 2.09 percent. NCL closed the day at Rs49.90, down 0.12 percent, after the company announced a FY21 EPS of Rs28.56 accompanied by a cash dividend of Rs5/share.

Telecard Limited was the most trade stock with 35.84 million shares. It gained Rs1.21 to reach Rs17.38 per share. It was followed by Byco Petroleum with 33.64 million shares, which closed higher by 83 paisas to Rs7.84 per share.

Stocks that recorded significant turnover included WorldCall Telecom, Nishat (Chunian), Unity Foods Ltd, TRG Pak Ltd, Hum Network, Azgard Nine, Treet Corp and Dolmen City.

Turnover in the future contracts rose to 126.73 million shares from 82.18 million shares previously.