KARACHI: The first day of the new year ended on high as the KSE-100 index gained 679.42 points. During the day, the index saw a surge of 1,119.48 points on the clarity of payment method against outstanding circular debt of the different Independent Power Producers (IPPs) in Pakistan.

The Karachi Share Index (KSE-100) closed up by 679.42 points (1.55 per cent) after closing at 44,434.80 points against the previous closing of 43,755.38 points. The market went up 44,870.90 points during intra-day trading, while recorded as low as 43,755.38 points.

Trading volume increased to 642.6 million shares today as compared to 578.2 million traded in the previous session, according to PSX website data. The daily traded value increased to Rs 27.303 billion from Rs 23.780 billion in the previous session, the data said.

According to Ali Poonawala, analyst at AKD securities, the benchmark KSE-100 closed strongly on the first trading day of the year backed by relatively improved participation (val/vol up 8/6%DoD) as a mid-day surge pushed the benchmark to record an intra-day gain of 1,119.48 points (or 2.49%) after a reported meeting between the IPPs and the government provided some clarity on the settlement of outstanding receivables (consequently circular debt).

Additionally, exports for December 2020 growing by 18.3%YoY, CPI clocking in at 7.97% for Dec 2020 (in line with expectations) and FFC increasing urea price by Rs 30/bag provided additional support to market sentiments where rotation into the laggard main board sectors (Oil & Gas, IPPs and Financials) was the primary driver of index performance today, he claimed.

The profit taking was at higher levels pared some intra-day gains.In term of volumes, the overall market traded 773 million shares where HASCOL recorded the highest volumes for the day with 35 million shares traded followed by ANL (30 million shares traded) and MLCF (25 million shares). Major contribution to the index came from HUBC (up 7.49%) while TRG was the biggest drag on the index (down 2.07%).

Jawwad Rauf, Investment Banking Consultant at Inter-Market Securities expect the rally to continue through January 2021, where defensive sectors are likely to join the cyclical ones in lifting the index toward a new all-time high. Our top picks include DGKC, LUCK, HBL, POL, PSO, FFC, INDU, MTL, NML and EPCL.

The share of Unilever Food further increased by Rs 500 to Rs 14,500 while Colgate Palmolive gained Rs 80 to Rs 2980. Similarly, Nestle Pakistan lost Rs 37.51 today to close at Rs 6,627.50 while Bata (Pak) lost Rs 21.31 to close at Rs 1,510.53.


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