The price run-up in the oil and gas sector once again accelerated the pace of the share market on Wednesday, which for the third consecutive session breached the new 7500 points level on the back of expectations of higher earnings. Business touched 1 billion shares level. The KSE-100 index rose 106 points, or 1.43 percent, to 7508.80 from 7402.80. The volume amounted to 1 billion shares as compared with 728 million shares of Tuesday. The market capitalisation rose to Rs 2.080 trillion, up from Rs 2.047 trillion.
Tanvir Abid, head of research at Live Securities, said that oil stocks yet again gained fervently, with PPL nearly touching the upper circuit level. This can be attributed to reports of new discoveries and privatisation rumours about PPL. The scrip gained a phenomenal 7.5 percent to close at the Rs 177.00 level.
Other oil scrips also participated in the rally as PSO, OGDC and POL all made increments of 0.8 percent, 2.7 percent and 1.3 percent respectively.
The Suis, too, responded positively as both SNGPL and SSGC gained 5.1 percent and 1.6 percent respectively.
Positive activity was witnessed in the banking scrips, too, on reports that SBP would raise banks' maximum paid-up capital requirement to $100 million. Going forward, PTCL is also reported to show some positive movement--probably even touching the Rs 70 level later during the week. Otherwise, the broader market seems ripe for a major correction.
Ovais Ahsan from Elixir Securities said that NBP jumped into action at the end of the day gaining 3.5 percent. "The stock looks good to us as a bonus issue seems to be on the cards. BOP is another banking stock, which could rally on the back of rumours of a bonus issue. With the SBP planning to raise the mandatory paid-up capital requirements of commercial banks to $100 million, a lot of banks would be looking at stock dividends to achieve the requirement giving punters reason to stay interested in the sector.
Sentiment in the market remained bullish. However, the upward movement of the index stayed erratic throughout the day. Three-and 12-month T-Bill auctions, leading to increase in cut-off yields of 40 and 50 bps, failed to dampen activity in the share market.
Offshore oil exploration news fuelled aggressive buying in PPL and the scrip closed near its upper circuit-breaker at Rs 177--up Rs 12.20. Cement sector started the session on a negative note but middle-of-the-day buying resulted in most sector scrips closing in the positive column. Lucky and DG Khan Cement were some of the volume leaders of the session and went up Rs 1.25 and Rs 2.85 to close at Rs 52.25 and Rs 71 respectively. OGDC was the top volume leader of the session and increased by Rs 2.40 to close at Rs 92.15. "With volumes at a healthy level showing continued investor interest in the market, we expect the market to remain in the positive column in the coming sessions."
Hasnain Asghar from Aziz Fidahusein said that the earning euphoria continued as fresh funds decided not to wait for corporate announcements and rather accumulated main stocks on expectations, although news of dispute regarding construction of dams in the technical committee meeting invited offloading in the cement sector.
Technically, ability of the index to open above the resistance of 7450-7457 and invite volume on strength allowed the index to smoothly breach the 7500 mark. The ability of the index to register a comeback after completing a retracement of 67 percent depicts strength. Next resistance stays at 7560-7567 while support would come around 7370-7377.
OGDC moved up to Rs 92.15 from Rs 89.75 on business of 179 million shares; PTCL finished at Rs 67.45, ie higher by Rs 1.60 on trading of 177 million shares; D G Khan Cement recorded an increase Rs 2.85 to Rs 71 on turnover of 87 million shares; Sui Northern Gas share price improved by Rs 3.05 to Rs 62.95 at around 64 million shares business; and Lucky Cement posted a gain of Rs 1.25 to Rs 52.25 on deals of 61 million shares.