The Pakistan Stock Exchange (PSX) began 2023 on a positive note as the KSE-100 Index rose nearly 1% owing to renewed optimism. In intra-day trading, the benchmark index rose nearly 600 points before retreating marginally to close below the 41,000 level.

Buying spell gripped the market from the initial hour and lifted the KSE-100 Index past the 41,000-point mark by midday. Selling pressure emerged in the final hour that erased some of the gains.

At close on Monday, the KSE-100 Index settled 395.45 points or 0.98% higher to finish at 40,815.9 points.

The market had also closed 2022 on a strong note as the final session saw the benchmark index rise 673.09 points or 1.69% to help it close at 40,420.45.

The rally on Monday was led by energy sector scrips as the market expected the government to announce measures to curtail circular debt.

Last month, Prime Minister Shehbaz Sharif directed Petroleum and Finance Divisions to prepare a master plan to reduce circular debt of the gas sector by 70% from existing Rs1.6 trillion to Rs500 billon.

Subsequently, the government of Pakistan formed a body to focus on curbing the ballooning problem.

Speaking to Business Recorder on Monday, Ismail Iqbal Securities Head of Research Fahad Rauf said according to historic data, January is usually the best month of the year because companies allocate fresh capital for investment in the market.

“Moreover, holiday season has just ended and investors are back to the equity market,” he said. “Energy related stocks posted a rally because investors expect the government to take measures to reduce the circular debt.”

In its report, Capital Stake said the PSX closed the first session of the new year positive.

“Rise in fertiliser prices and news of a possible resolution of the circular debt helped revive investors' interest,” it said.

On the economic front, CPI-based inflation increased to 24.5% in December 2022 on a year-on-year basis compared to 23.8% in November 2022.

Sectors raising the benchmark KSE-100 Index higher included banking (148.99 points), fertiliser (147.17 points), oil and gas exploration (108.27 points).

Volume on the all-share index fell to 242.2 million from 284.5 million on Friday. The value of shares traded declined to Rs7.3 billion from Rs7.9 billion recorded in the previous session.

Pak Petroleum was the volume leader with 14.96 million shares, followed by Pak Refinery with 12.7 million shares, and Hascol with 12.2 million shares.

Shares of 334 companies were traded on Monday, of which 211 registered an increase, 107 recorded a fall, and 16 remained unchanged.