KARACHI: Stocks extended gains on Tuesday with the KSE-100 index adding 381 points or 1.22 per cent to close at 31,680.72.
Investors were enthused by the stunning fall in inflation number at 3.96pc, which was unanimously seen to be a harbinger of cut in discount rate by 50 basis points in the next SBP monetary policy.
Resultantly, the leveraged sectors saw boost in stock prices. Positive news on other fronts such as the diversion of 85mmcfd (million cubic feet per day) gas to the textile industry by the government; cut in interest rates on National Savings Schemes and stalemate on the political front, emboldened individual and institutional investors to enter the market for cherry-picking. On Tuesday, foreigners were net sellers of stocks worth $0.39 million.
Local participants’ interest returned to the heavyweight oil and gas sector after reports that the Saudi Arabia, the world’s largest oil exporter, on Monday increased the prices for oil in Asia, the first raise in five months.
All the 13 listed stocks on the oil and gas sector gained in varying amounts with the heaviest weighted OGDC closing up by Rs7.12, after hitting intra-day ‘upper circuit’. The OGDC stock added around 80 points to the index.
Analyst Fahad Ali at a major brokerage house admitted that oil and gas sector was the major contributor to the index upswing on Tuesday. Some of the stocks that hit their ‘upper circuits’ included Bank Alfalah, Tariq Glass, Treet Corporation, PIA and Biafo Industries.
Brokerage Sunrise Capital commented that the banking sector remained the focus of investors’ attention with trading seen in 50m shares followed by cement sector 46.6m shares and electricity sector with volume of 39m shares.
In the oil and gas sector PSO, POL, and OGDC surged by 2.86pc, 0.61pc and 3.44pc. Buying was observed in the banking sector, where values of BAFL, AKBL and BOP surged by 4.80pc, 1.51pc and 1.45pc respectively.