PSX Plunges Over 2,000 Points Amid Global Market Concerns

Following a recovery on Tuesday, the Pakistan Stock Exchange (PSX) experienced a downturn on Wednesday, with the bourse opening lower and subsequently plummeting by over 2,000 points in early trading. Market sentiment remained cautious due to prevailing global headwinds.

The benchmark KSE-100 Index reached an early session low of 112,891.48, marking a decrease of 2,640.95 points, or -2.29%. Earlier, the index had climbed to an intraday high of 115,092.12, which was still 440.31 points, or -0.38%, below the previous day’s close of 115,532.43.

Independent investment and economic analyst AAH Soomro attributed the widespread sell-off to the influence of broader market dynamics.

“I believe it’s a trickle-down effect of the global equity market meltdown, which — if focused on current oil prices below $60 — is a net positive event for the economy,” he stated.

Soomro further explained, “In the short term, though, people will take this as an excuse to book profits as the index has had a sharp, almost 200% return from 40,000 levels.”

He also projected a positive outlook, saying, “In a few weeks — if not days — this will subside as investors weigh the positive impact on future interest rate cuts, currency reserves, $2 billion in IMF inflows, and a sharp decrease in domestic oil prices leading to increased domestic consumption.”

Investor confidence was notably affected by the implementation of President Donald Trump’s new tariffs on numerous countries, including a significant 104% duty on Chinese goods. This development has intensified global trade tensions, heightening concerns about a potential global economic slowdown. Consequently, equity markets have declined, and currencies across Asia have weakened.

Japan’s Nikkei saw a fall of over 3%, while South Korea’s won dropped to a 16-year low. Investors have increasingly sought refuge in cash, triggering a sell-off in government bonds. These effects have extended to emerging markets such as Pakistan, where market sentiment was already fragile.

This downturn follows a strong recovery on the PSX the previous day, where the KSE-100 index increased by 622.95 points, or 0.54%, to close at 115,532.43, after reaching an intraday high of 116,692.29.