Stocks began the new year in the green, with the benchmark KSE-100 index closing at 41,400 points – up 664 points – registering a 1.64 per cent increase from the opening bell.

Analysts have attributed this rise to the new year’s “euphoria” coupled with a positive economic outlook in the medium to long term.

Speaking to Dawn.com, Ali Asghar Poonawala, Deputy Head of Research at AKD Securities, said, “There was no negativity to check the rise today.”

In the past week, on days when the market has risen, the gains have usually been erased by day end as investors turned to profit-taking. However, Poonawala noted that today the market continued its green trajectory because “there were no dampeners and the new-year euphoria kept going” as expectations from the year ahead are largely positive.

He said a lot of the positivity arose from an expectation that interest rates will go down this year, and with the rupee now stabilising against the dollar, the market was anticipating an influx of foreign institutional investment.

“Inflation came in at 12.63% for Nov '19, meeting market expectations and keeping sentiments buoyant," he said.

Poonawala added that mutual fund participation is expected to continue sustaining upward momentum.

Another analyst at an asset-management company reciprocated these views, saying that the market was on the whole expecting an inflow of dollars in the medium to long term, which was why a lot of investors took their positions today, contributing to the surge.

He added that inflation is also expected to taper down this year, implying that prices of basic commodities are expected to stabilise, all of which added to the positivity being witnessed today.

In contrast, the stock market remained directionless on Tuesday, the last day of 2019, with the KSE-100 index closing 152.55 points (0.37 per cent) in the red at 40,735.08 after having traded in a narrow band between the intraday high and low of 110 and 119 points. Investor activity was also low on Tuesday as only 177 million shares were traded, compared to over 238m shares that exchanged hands today.

More than half of the total 238m shares (119.4m) were attracted by K-Electric Ltd (KEL) after Nepra approved the utility's power tariff hike, while in a separate development the Hub Power Company (HUBC) approached KEL to enact a carving out of its RFO-fired base plant.

According to analysts, HUBC in a planned Nepra hearing had disclosed that it plans to convert the RFO-fired base plant to coal and sell electricity to KEL, pending regulatory approvals and associated capital expenditure (CAPEX).