Led by oil stocks, PSX soars to new peak

KARACHI:

Pakistan Stock Exchange (PSX), in a historic rally, surged to a new peak close to 85,000 points on Monday as it got extensive support from robust performances by blue-chip oil stocks in anticipation of handsome results in the ongoing earnings season.

In the morning, trading began on a lacklustre note with the KSE-100 index soon touching its intra-day low of 83,303.54 points. However, as the day progressed, the market consistently moved upwards.

Pakistan Petroleum Limited's (PPL) settlement with Iraq's Midland Oil Company, which led to inflows of $6 million, was a key factor driving the upturn.

Rising global crude oil prices, lower bank lending rates and discussion on the privatisation of state-owned enterprises (SOEs) further supported the bullish sentiment.

The market reached its intra-day high of 85,047.81 before close of trading and settled near that level with substantial gains of over 1,350 points.

"Stocks closed at an all-time high, led by blue-chip oil shares, amid speculation in the earnings season. Inflows of $6 million for PPL following settlement with Iraq's Midland Oil triggered the rally," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

"Surging global crude oil prices, slump in bank lending rates and government deliberation on privatisation of SOEs played the role of catalysts in bullish activity at the PSX."

At the close of trading, the KSE-100 index registered significant gains of 1,378.34 points, or 1.65%, and settled at 84,910.30.

Topline Securities, in its commentary, noted that the KSE-100 index soared to an impressive close at 84,910, jumping 1,378 points, or 1.65%.

"This surge was driven by falling bond yields and an expected sharp drop in inflation, igniting a wave of optimism in the market," it said.

Key players like Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL), Fauji Fertiliser, Pakistan Oilfields and Engro Corporation fueled the rally, contributing a remarkable 752 points to the index, Topline added.

Arif Habib Limited (AHL), in its report, stated that there was an "aggressive start to the week with the KSE-100 up 1.65% and in touching distance of 85,000."

Some 73 shares rose while 23 fell with OGDC (+7.66%), PPL (+6.82%) and Fauji Fertiliser (+2.53%) being the biggest contributors to index gains, it said, adding that PPL announced that its subsidiary, Pak Petroleum Asia E&P BV, had reached a mutually favourable settlement with Iraq's Midland Oil Company.

"Near-term support rises to 84,000" and keeping that in view higher prices should be expected, it noted.

JS Global analyst Mohammed Waqar Iqbal observed that the KSE-100 index surged 1,378 points and closed at 84,910.

"Broad-based buying was witnessed, with strong investor interest in exploration and production (E&P) and fertiliser sectors throughout the day," he said. "We recommend that investors view any dips as a buying opportunity," the analyst added.

Overall trading volumes increased to 449.5 million shares compared with Friday's tally of 381.5 million. The value of shares traded during the day was Rs30.2 billion.

Shares of 448 companies were traded. Of these, 218 stocks closed higher, 167 declined and 63 remained unchanged.

Pakistan Petroleum was the volume leader with trading in 40.8 million shares, gaining Rs8.09 to close at Rs126.69. It was followed by Hub Power with 28.1 million shares, losing Rs3.64 to close at Rs121.70 and Fauji Cement with 23.1 million shares, gaining Rs1.05 to close at Rs28.

During the day, foreign investors bought shares worth Rs784.2 million, according to the NCCPL.