PSX reopens to 3,800-point plunge as global market rout sparks panic
Frontier market bonds caught in heavy selloff, Pakistan drops more than 13 %
Stocks nosedive 8,235.88 points to drop to 110,555.78 points during intraday trading
KARACHI ( WEB NEWS )
The Pakistan Stock Exchange (PSX) faced one of the toughest days in its history as the key index lost more than 8,000 points on Monday amid bloodbath in global markets.
Trading was suspended when the KSE-100 index lost more than 6,000 point around midday. At 3 pm, the index was at 114,652.39 after recovering 4,000 points.
The trend coincides with global markets crash amid ongoing tariff war. This is said to be the worst day in the history of PSX, which has seen the all-time worst slump in a day.
The KSE-100 index lost 8,235.88 or -6.93% to 110,555.78 – one of the steepest single-day drops – when trading was stopped.
Earlier in the morning session, the PSX was hit by bearish trend as the KSE-100 index plunged more than 3,000 points amid global stocks crash.
The market opened at 117,601.62 but fell steadily with more than 147 million shares exchanging hands. Around 11:30am, the benchmark KSE-100 index plunged by 4,411.07 points, or 3.71%, to reach 114,380.59.
The KSE-100 index somewhat recovered and closed at 114,909 after regaining thousands of points.
On Friday, the 100 index turned around to bearish trend after hitting the record high of 120,796.67 points. However, it retreated later losing 146.45 points and closing at 118,791.66 points.
A total of 553,668,391 shares were traded during the day whereas the price of shares stood at Rs35.492 billion.
As many as 457 companies had transacted their shares in the stock market, 151 of them recorded gains and 258 sustained losses, whereas the share price of 48 companies remained unchanged.
SAUDI STOCK MARKET
On the other hand, the Saudi stock market has crashed due to the impact of US tariffs and the decline in oil prices, resulting in a loss of 500 billion riyals.
The Saudi benchmark TASI index closed down by 700 points at 11,200. The oil company Aramco incurred a loss of 340 billion riyals in terms of share value, and the Saudi National Bank, along with other major companies, also suffered significant losses.
Meanwhile, major stock indexes plunged in Asia on Monday as US President Donald Trump showed no sign of backing away from his sweeping tariff plans, and investors bet the mounting risk of recession could see the Federal Reserve cutting rates as early as May.
Futures markets moved swiftly to price in almost five quarter-point cuts in U.S. rates this year, pulling Treasury yields down sharply and hampering the dollar on safe havens.
ASIAN STOCKS
Reuters reports US President Donald Trump warned foreign governments they would have to pay “a lot of money” to lift sweeping tariffs, characterising the duties as “medicine” and triggering further carnage across global financial markets on Monday.
Asian stocks posted steep losses in early trading and US stock market futures opened sharply lower as investors registered concerns that Trump’s tariffs could lead to higher prices, weaker demand, lower confidence and potentially a global recession.
Speaking to reporters aboard Air Force One on Sunday, Trump indicated he was not concerned about losses that have already wiped out trillions of dollars in value from share markets around the world.
“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said as he returned from a weekend of golf in Florida.
Trump said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs as high as 50% due to take effect this week.
“They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.
Trump’s tariff announcement last week jolted economies around the world, triggering retaliatory levies from China and sparking fears of a global trade war and recession.
Japan, one of Washington’s closest allies in Asia, is among countries hoping to strike some deal but its leader Shigeru Ishiba said on Monday results “won’t come overnight”.
Investors, however, are not hanging around.
As Ishiba spoke in parliament, Tokyo’s Nikkei cratered to a 1-1/2-year low, led by stocks in the country’s banks – some of the biggest lenders by assets globally – which have shed almost a quarter of their market value over the last three trading days.
Meanwhile, Israeli Prime Minister Benjamin Netanyahu said he would seek a reprieve from a 17% tariff on the country’s goods during a planned meeting with Trump on Monday.
An Indian government official told Reuters the country does not plan to retaliate against a 26% tariff and said talks were under way with the US over a possible deal.
In Italy, Prime Minister Giorgia Meloni – a Trump ally – pledged on Sunday to shield businesses that suffered damage from a planned 20% tariff on goods from the European Union.
Trading was halted at the Pakistan Stock Exchange (PSX) for an hour after the benchmark index plummeted by 6,000 points triggering the suspension, only to drop another 2,000 points when trading resumed, bringing the total decline to a record 8,600 points in intraday trade amid global market turmoil following China’s retaliatory tariffs against the United States.
The automatic circuit breakers are designed to prevent panic selling and provide investors time to reassess during extreme market volatility.
The benchmark KSE-100 index initially declined by 6,287.22 points, or 5.29 per cent by 11:58am, before trading was halted. Shortly after reopening, it declined by a cumulative 8,687.69, or 7.31pc, from the last close to stand at 110,103.97 at 1:15pm.
What has happened so far:
- Market suspended at 11:58am for an hour for a cool down period
- Analyst attributes decline to global recession fears
- Brokerage firm says record day-on-day decline
- India’s main stock index falls more than 3pc at open
- Selling in Asia was across the board, with no sector unharmed
Finally, the index closed at 114,909.48, down by 3,882.18 or 3.27pc, from the last closed
Awais Ashraf, director research at AKD Securities, attributed the decline to “investors’ fears that tariff hikes could lead to global recession through weaker demand”.
“We believe being an import-led economy … the imposition of US tariffs would benefit us due to possible decline in global commodity prices,” he added.
Mohammed Sohail, chief executive of Topline Securities, also attributed the decline to the global market crash.
He noted that the stock market had halted after falling 5pc to cool down around 12pm.
Sohail added that the market lost today due to the escalating tariff war initiated by the US.
“After hitting a halt when it fell 5pc, [the] trading resumed after [a] cooling period and saw some value buying,” he said.
He said that the oil and gas exploration sector, technology, and textile sector were expected to be affected as they were either linked to global commodity prices or global aggregate demand.
A notice by the PSX read that a market halt had been triggered due to a 5pc decrease in KSE-30 index from the previous trading day, adding that all outstanding orders had been cancelled automatically by the system.
It noted that the market will resume at 1:03pm after being suspended at 11:58am.
Arif Habib Limited, in a note, said this was a historic day-on-day decline, leading to a market halt.
Yousuf M. Farooq, director research at Chase Securities, said, “Contagion. Markets are broadly down on fears of a global recession.
About the initial decline, he had noted that the index had witnessed “a relatively modest drop compared to other regional markets”.
He noted that there was notable selling pressure in oil and banking stocks.
“Lower oil prices are expected to negatively impact earnings for oil exploration companies,” he stated, highlighting that at the same time, textile exporters could “face headwinds from new US tariffs”.
“While these tariffs pose short-term risks, particularly for the textile sector, the overall impact of the US trade policy may prove neutral to positive for Pakistan — especially if commodity prices stay low,” he added.
In the short term, he remarked that the textile sector could face profitability challenges due to both direct and indirect (first and second round) impact.
“However, lower global commodity prices may help ease inflationary pressures domestically, potentially leading to lower interest rates,” he said. “This, in turn, could support a gradual recovery in valuations.”
On the government’s role, he stressed that the federal government would have to “move quickly and start negotiations for the removal of tariffs from Pakistani products”.
The previous time that the PSX had seen such a massive slump was on December 19, 2024 when the KSE-100 index shed 4,795.31 points amid rising political noise and missile programme-related US sanctions on Pakistani companies.
Trading floors were overcome by a wave of selling as investors fled to the hills on the worst day for equities since the pandemic, with Hong Kong shedding 10pc, Tokyo briefly diving 8pc and Taipei more than 9pc.
Futures for Wall Street’s markets were also taking another drubbing, while concerns about the impact on demand also saw commodities slump.
Donald Trump sparked a market meltdown last week when he unveiled sweeping tariffs against US trading partners for what he says was years of being ripped off and claimed that governments were lining up to cut deals with Washington.
But after Asian markets closed on Friday, China said it would impose retaliatory levies of 34pc on all US goods from April 10.
It also imposed export controls on seven rare earth elements, including gadolinium — commonly used in MRIs — and yttrium, utilised in consumer electronics.
Hopes that the US president would rethink his policy in light of the turmoil were dashed Sunday when he said he would not make a deal with other countries unless trade deficits were solved.
He denied that he was intentionally engineering a selloff and insisted he could not foresee market reactions.
“Sometimes you have to take medicine to fix something,” he said of the ructions that have wiped trillions of dollars off company valuations.
India’s main stock index falls more than 3pc at open
Meanwhile, Indian stocks fell at the open of trading, with the benchmark Nifty index down more than 3pc.
Trump slapped a flat 26pc tariff on imports from India last week, with New Delhi saying it was examining both “implications” and “opportunities” from the duty hikes.
The Nifty 50 — which presents the largest Indian companies on the national stock exchange — was down 3.55pc.
The Nifty IT, the country’s powerful information technology companies, and who have the United States as their single biggest market, was down 5.53pc.
The Times of India called the stocks slump a “bloodbath”.
India Today noted it was one of the biggest falls in the market since May 2024, when unexpected election results shook the markets.
After the tariffs were announced, India’s Department of Commerce said it was “carefully examining the implications of the various measures”, adding in a statement that it was “also studying the opportunities that may arise due to this new development”.
India’s pharmaceutical sector, which exported more than $8 billion of products to the United States in the 2024 fiscal year, emerged unscathed — with drugs exempt from its reciprocal tariff move.
Trump, speaking while unveiling the tariffs, said that Indian Prime Minister Narendra Modi was a “great friend” but that he had not been “treating us right”
No sector spared
The selling in Asia was across the board, with no sector unharmed by the savage selling — tech firms, car makers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets.
Among the biggest losers, Chinese e-commerce titans Alibaba tanked more than 14pc and rival JD.com shed 13pc, while Japanese tech investment giant SoftBank dived more than 10pcand Sony gave up 9.6pc.
Shanghai shed more than six pc and Singapore eight pc, while Seoul gave up more than five pc triggering a so-called sidecar mechanism — for the first time in eight months — that briefly halted some trading.
Sydney, Wellington, Manila and Mumbai were also deep in the red. Steve Cochrane, chief Asia-Pacific economist at Moody’s Analytics, said: “We could see a recession happen very quickly in the US, and it could last through the year or so, it could be rather lengthy.
“And if there’s a recession in the US, of course, China will feel it as well because demand for its goods will be hit even harder. Harder than they would have been hit just because of the tariffs.” Concerns about demand saw oil prices sink more than three pc on Monday, having dropped around seven pc on Friday. Both main contracts are now sitting at their lowest levels since 2021.
Copper — a vital component for energy storage, electric vehicles, solar panels and wind turbines — also extended losses.
“The market is in free-fall mode again, punching through floors,” said Stephen Innes at SPI Asset Management. “Trump’s team isn’t blinking. The tariffs are being treated as a victory lap, not a bargaining chip.” The losses followed another day of carnage on Wall Street on Friday, where all three main indexes fell almost 6pc.
That came after Federal Reserve boss Jerome Powell said US tariffs will likely cause inflation to rise and growth to slow and warned of an “elevated” risk of higher unemployment.
The measures by Trump are likely to give US central bankers a headache as they try to balance the need for interest rate cuts to support the economy with the need to keep a lid on prices.
His comments came after Trump had insisted “my policies will never change” and urged the Fed to cut rates.
“Powell’s hands are tied,” said Innes. “He’s acknowledged the obvious — that tariffs are inflationary and recessionary — but he’s not signalling a rescue.
“And that’s the problem. This time, the Fed’s inflation mandate is forcing it to keep the safety net rolled up while asset prices get torched.”
Tim Waterer, chief market analyst at KCM Trade, said: “Traders are nervously watching the two biggest economies going toe to toe on tariffs and are fearing that both could receive knockout blows from a prolonged economic fight.”
Frontier market bonds caught in heavy selloff, Pakistan drops more than 13 cents
Separately, international sovereign bonds of a number of frontier markets suffered sharp selloffs.
Longer-dated dollar-denominated bonds issued by Pakistan dropped more than 13 cents, Sri Lanka’s more than 6 cents while those of Egypt, Angola and Kenya all tumbled more than 4 cents in the dollar, Tradeweb data showed.