The Pakistan Stock Exchange on Wednesday declined by over 2,600 points, a day after the index posted a mild recovery following global market turmoil in response to fears that the trade war between the United States and China would escalate.
The benchmark KSE-100 index plunged by 2,640.95 points, or 2.29 per cent, to stand at 112,891.48 at 10:49am from the previous close of 115,532.43.
The decline comes as additional US tariffs on Chinese imports are set to reach 104pc today, as Washington doubles down on planned action after Beijing vowed a “fight to the end” on levies.
Awais Ashraf, research director at AKD Securities, pointed out that the hike in US tariffs on China to 104pc has “heightened recession risks due to a slowdown in global growth, dampening investor sentiment at the PSX”.
“However, lower commodity prices — especially oil — and a potential competitive advantage from the new tariffs could positively impact our external account,” Ashraf noted.
Yesterday, Ali Najib, head of sales at Insight Securities, emphasised the need for observing market behaviour after April 9, when the global trade tariffs will be implemented, and assessing their repercussions on the affected countries.
He said the reciprocal tariffs might trigger market volatility, with investor sentiment turning cautious, adding that export-driven stocks could decline while safe-haven assets like gold might gain.
Trade tensions with countries having huge trading volumes could spark retaliation, affecting global supply chains and earnings outlooks, potentially leading to a short-term market pullback.
Today’s fall in PSX follows Monday’s bloodbath at the PSX when shares plunged by 3,882 points amid rising fears of a global recession and retaliation from the United States’ major trade partners and China.
That day, the KSE-100 index witnessed a record intra-day plunge (points-wise) of 8,687.68 points, before partially recouping some losses on late value-hunting, following a mid-session trading halt.
More to follow
