KARACHI: Stocks were on fire also on the second day of the New Year with the KSE-100 index raking in astounding gains of 1,080.76 points (2.61 per cent).

The index galloped past the 42,000-level and settled at 42,490.76, representing 16-month high — trading at that level last seen on Aug 28, 2018. Market capitalisation surged by Rs160bn in a single day on Thursday.

The bulls rampaged all over the market right from the start with share prices of scores of companies, across the board, quickly hitting upper circuits. Investors’ exuberance was fed by the downward adjustment in profit rates between 24bps and 36bps on National Savings Schemes, which signified the possibility of flow of funds into the capital market going forward.

Positive reports by several brokerage houses provided fuel to the optimism on the basis of ongoing macroeconomic recovery, and improving outlook for corporate profitability. Mutual Funds that were sitting on cash for a while entered the market and built fresh positions worth $8.02 million.

They were assisted by the banks who reallocated $4.09m, generated through sale of shares for profit-taking at the end of 2019. Foreigners remained sidelined as overseas fund managers were still in the Christmas and New Year holiday mood.

On political front, the major opposition party PML-N decided to support the Army Act Amendment Bill in the National Assem­bly which settled at rest the apprehensions of a showdown between the government and the Opposition, giving more confidence to the market.

The volume increased 24pc to 412.4m shares, from 330.7m while traded value surged by 111pc to reach $110.2m, as against $52.1m, evidencing investors’ interest in blue chips.

Major market movers of the day were Hub Power, up 5pc, Habib Bank 3.2pc, Engro Coporation 3.3pc, United Bank 3.9pc, Pakis­tan Petroleum 3.3pc, Lucky Cement 5pc and Oil and Gas Development Company 3.0pc.

Investor interest was witnessed in cement and banking where Lucky, DG Khan, Fauji, Cherat, Bank Al Habib, United, Alfalah, Faysal and MCB were the major gainers. Steel also enjoyed the bull run where Mughal, Inter­national Industries, Amreli, Aisha 4pc and International closed in deep green.

Published in Dawn, January 3rd, 2020