Blue-chip oil stocks fuel PSX's record rally

Pakistan Stock Exchange (PSX) extended its record-breaking spree on Tuesday as it notched up gains of over 750 points, primarily triggered by strong gains in blue-chip oil stocks and a positive economic outlook.

Earlier, trading commenced at the intra-day low of 84,897.98 points but the market spiked soon as the momentum shifted towards positive cues.

Bullish sentiment was fueled by robust earnings projections for oil companies and the stability of Pakistani rupee following news of $3.2 billion in potential foreign loans, including $1.2 billion worth of Saudi oil facility.

Additionally, higher global crude oil prices, lower bank lending rates and falling Eurobond yields boosted investor confidence. Such positive factors propelled the KSE-100 index above the 85,000 mark at the intra-day high of 85,824.27 points.

Though the market retreated from the peak, it rebounded in final trading hours and closed near the day's high. "Stocks closed at an all-time high, led by blue-chip oil shares, on strong earnings outlook and rupee stability after reports of commitment of $3.2 billion in foreign loans including $1.2 billion worth of Saudi oil facility," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

"Higher global crude oil prices, falling bank lending rates and lower Eurobond yields on improving external flows played the role of catalysts in bullish activity at the PSX." At the close of trading, the KSE-100 index registered significant gains of 753.68 points, or 0.89%, and settled at 85,663.98.

Topline Securities, in its commentary, noted that Tuesday's surge was fueled by declining bond yields and an anticipated significant decrease in inflation, sparking a wave of optimism that attracted investor interest.

Oil and Gas Development Company (+3.14%) and Pakistan Petroleum (+1.13%) from the exploration and production (E&P) sector were the stars of the trading session as they cumulatively contributed 137 points to the KSE-100 index, it said.

Key players like Bank AL Habib, Habib Bank, Engro Fertilisers, Oil and Gas Development Company and Bank Alfalah fueled the rally, contributing a remarkable 664 points to the index, Topline added. Arif Habib Limited (AHL), in its report, stated that the 85,000 level was crossed on the back of strong performance from banks and E&P firms.

Some 63 shares rose while 32 fell with Bank AL Habib (+6.56%), Habib Bank (+6.7%) and Engro Fertilisers (+3.8%) being the biggest contributors to the index gains, AHL said, adding that Hub Power (-8.04%), Mari Petroleum (-1.84%) and Lucky Cement (-2.26%) were the largest drags. JS Global analyst Mohammed Waqar Iqbal observed that broad-based buying was witnessed at the bourse, with strong investor interest in E&P and fertiliser sectors throughout the day.

"Looking ahead, textile and auto sectors present attractive investment opportunities and we recommend taking advantage of any dips as a buying opportunity," the analyst added. Overall trading volumes increased to 506.6 million shares compared with Monday's tally of 449.5 million. The value of shares traded during the day was Rs33.05 billion.

Shares of 448 companies were traded. Of these, 193 stocks closed higher, 194 declined and 61 remained unchanged.

Hub Power was the volume leader with trading in 45.8 million shares, losing Rs9.78 to close at Rs111.92. It was followed by Pakistan Petroleum with 21.5 million shares, gaining Rs1.43 to close at Rs128.12 and Pakistan Refinery with 21.3 million shares, gaining Rs0.72 to close at Rs25.57.

During the day, foreign investors sold shares worth Rs417.7 million, according to the NCCPL.