Shares at PSX rally on first day of new year

On the first day of the new year, the stock market kicked off with a bang as the benchmark KSE-100 index rose nearly 1,119 points during intraday trading.

The index — which had opened the year at 43,55 — had risen 918 points to 44,673 at around 11:30am.

After the break for Friday prayers, shares continued an upward trajectory, reaching the day's high of 44,875 – up 1,119 points or 2.5 per cent – by 2:38pm.

But late in the afternoon, the index shed almost half of these gain, closing at 44,435, down 679.42 points — or 1.55 per cent — for the day.

Deputy Head of Research at AKD Securities, Ali Asghar Poonwala, while talking to Dawn.com, said the reason behind the new-year rally was an expectation that liquidity will improve in the power supply chain.

"It's mostly from the market grapevine indicating improved liquidity in the power chain, with clearances made in November and December resting higher than usual.

"This fueled a bullish sentiment in an otherwise neglected independent power producers (IPPs) and the state oil marketing company PSO (Pakistan State Oil) which remained marred by circular debt related dues."

He added that a possible hike in the base consumer tariff by the government — a core requirement of the International Monetary Fund (IMF) — will improve liquidity further.

On Thursday, the benchmark KSE-100 index gained 60.62 points to close 2020 at 43,755, which was about the same as closing at the 30-month high of 43,767 points seen on Dec 17. On an annualised basis, the index provided a return of 7pc in calendar year 2020.