Pakistan eyes investments from Saudi Arabia, China, US as minerals summit kicks off tomorrow

KARACHI: The Pakistan Stock Exchange fell to an intraday low of 8,687 points, the largest intraday point-wise drop in PSX history, before ending the session down 3.3% from the previous close, as major stock indexes plunged on Monday over US President Donald Trump’s sweeping tariff plans.

Trump has announced tariffs on goods imported from the rest of the world, saying a 10% tariff on all nations and much higher rates of up to 50% on individual countries will boost the US economy and protect jobs.

Asian equity markets sank, European shares crashed to a 16-month-low and oil prices plummeted on Monday as investors feared the duties Trump announced last week could lead to higher prices, weaker demand and potentially a global recession.

The PSX suspended stocks trading for an hour at 11:58 am after the KSE-30 index, which tracks the performance of the 30 most liquid companies listed on the exchange, fell by 5.6% or 2,055 points to 34,723 points. According to PSX rules, trading is halted if the KSE-30 index falls below 5% and keeps trading below that number continuously for five minutes. The benchmark KSE-100 index, which measures the performance of 100 companies, lost 5.3 percent or 6,287 points, the highest intraday drop in terms of points.

However, as trading resumed at 1:03pm, the index pared some losses and ended the week’s first session at 114,909 points, down 3.3% or 3,882 points from the previous close.

“A brutal day at the Pakistan Stock Exchange as the market mirrored the global sell-off, opening on a sharply negative note and experiencing relentless selling pressure throughout the day,” Topline Securities said in its daily market review. 

“The benchmark index nosedived to an intraday low of 8,687 points … While this decline set a new record in absolute terms, it was not the steepest in percentage terms. The most severe single-session percentage fall remains the 12.4% drop on June 1, 1998.”

Mohammed Sohail, CEO at Topline Securities Ltd, said in a note to clients the global market crash would most affect the oil and gas exploration, technology and textile sectors “as these are either linked to the global commodity prices (like crude oil) or linked with global aggregate demand.”

Trump’s Wednesday tariff announcement shook global stock markets, wiping out $5 trillion in value for S&P 500 index companies by Friday’s close, a record two-day decline driven by recession fears, prices for oil and commodities plunged, while investors fled to the safety of government bonds.

Washington has also imposed 29% tariffs on Pakistani goods. 

“The sharp selloff this morning mirrors a broader wave of global market volatility, driven by the US administration’s recent imposition of sweeping tariffs,” Shahid Ali Habib, chief executive officer at Arif Habib, told Arab News. “These measures have intensified fears of a global trade war, shaking investor confidence worldwide.”

“Impact on the KSE-100 index is a reflection of investor anxiety as they anticipate negative effects on overall economic stability,” Muhammad Waqas Ghani, head of research at JS Global Capital, said.

The stock market slump is bound to weigh on investor sentiments in Pakistan, where equity traders had just started earning profits from a boom triggered by a much-awaited IMF deal with Pakistan last month for a new $1.3 billion climate arrangement and a successful first review of an ongoing 37-month bailout program.