Investor unease returned to the stock market on Wednesday as global market jitters dragged the KSE-100 Index sharply lower, wiping out the momentum from Tuesday’s rebound.
The Pakistan Stock Exchange’s (PSX) benchmark index plunged over 2,000 points in early trading on Wednesday, dipping to an early session low of 112,891.48, reflecting a drop of 2,640.95 points, or 2.29%.
The index hit an intraday high of 115,092.12, still 440.31 points, or -0.38%, below the previous close of 115,532.43.
AAH Soomro, an independent investment and economic analyst, attributed the sell-off to broader market forces.
“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 said.
“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 said.
He added: “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 shaken as President Donald Trump’s sweeping new tariffs on dozens of countries — including a staggering 104% duty on Chinese goods — came into effect, intensifying global trade tensions. The move deepened concerns about a worldwide economic slowdown, sending equity markets tumbling and currencies sliding across Asia.
Japan’s Nikkei fell over 3%, South Korea’s won plunged to a 16-year low, and investors sought safety in cash, spurring a sell-off in government bonds. The ripple effects hit emerging markets like Pakistan, where sentiment was already on edge.
The downturn comes a day after the PSX staged a strong comeback, with the KSE-100 rising 622.95 points or 0.54% to close at 115,532.43, having touched an intraday high of 116,692.29.
