Shares at the Pakistan Stock Exchange (PSX) opened the year in green, buoyed by investor interest in the fertiliser and energy sectors.

The benchmark KSE-100 index gained 395.45 points, or 0.98 per cent, to close at 40,815.90 points. It reached an intraday high of 607.06 points, or 1.5pc, around 2:03pm but later erased some of its gains.

“An increase in urea prices led to investor interest in the fertiliser sector, while expectations of circular debt resolution continue to lift the energy sector,” Head of Equity at Intermarket Securities Raza Jafri said.

He added, however, that the market needed some “comfort” on the balance of payments position for the bounce to sustain.

Arif Habib Corporation’s Ahsan Mehanti said the rally was led by the oil and banking sectors as investors weighed surging global crude oil prices and the finance minister’s affirmation of completing the International Monetary Fund (IMF) programme and subverting default.

“Speculations ahead of corporate earning announcements and expectations for early resolve to gas circular debt crisis played a catalyst role in bullish activity,” he commented.

Meanwhile, former PSX director Zafar Moti attributed the stock market’s rise to reports that letters of credit (LCs) were being opened, and the State Bank of Pakistan’s (SBP) recent decision to lift curbs on the import of essential items.

“This will lead to ease of doing business for importers and items that [were stuck] at the port will now be available in the market. Once poultry feed is imported, the prices of eggs and poultry will also reduce. This is good news for the market,” he added.

Prices of urea fertiliser, which is in high demand for wheat crops these days, have been increased by around 8pc.

A notice issued by Engro Fertilisers Limited last week said that its brand of urea compost would be marketed at a rate of Rs2,440 per 50kg bag from Jan 1, 2023, an increase of Rs190 per bag.

A spokesperson for the company claimed that the increase was forced because of rising production costs.

On Monday, Engro Fertilisers Limited’s shares gained Rs2.91, or 3.79pc

Meanwhile, the energy sector also performed well, with Pakistan Petroleum Ltd (PPL) shares up Rs3.23 or 4.74pc; Cynergyico Pk Limited’s up Rs0.21 or 5.69pc; and Sui Northern Gas Pipelines’s (SNGPL) up Rs2.81 or 7.48pc.

The energy sector was behind the index’s rally in the last few trading days of 2022 following the government’s constitution of a committee for the settlement of circular debt in the gas sector.

Finance Minister Ishaq Dar had directed the committee on Dec 29 to finalise its report within three working days to resolve the issue.