KARACHI: The Pakistan Stock Exchange (PSX) witnessed a dramatic sell-off on Monday, with the KSE-100 Index plummeting by over 3,000 points during early trading as global markets reel from rising trade tensions and local economic concerns compound investor anxiety.
The index touched an intraday low of 114,746.23, down 4,045 points (-3.41%), with a high of 117,601.62 — still significantly below the previous close of 118,791.66.
Global Turmoil Sends Shockwaves Through PSX
Analysts attributed the plunge to a combination of external shocks and local policy concerns.
“Investor sentiment is being shaken by uncertainty around the Trump administration’s tariff regime and the fallout it’s creating in US and Asian markets,” said Mustafa Mustansir, Director of Research at Taurus Securities.
Asian markets nosedived:
- Nikkei (Japan): -6%
- South Korea: -5%
- MSCI Asia-Pacific (ex-Japan): -3.6%
- Chinese Blue Chips: -4.4%
- Taiwan: nearly -10% after reopening
- Saudi Arabia (Sunday): -6.78%, its worst post-COVID loss
“Markets are bracing for a global slowdown, possibly a recession, as international trade frictions escalate,” added Amreen Soorani, Head of Research at Al Meezan Investment.
Local Concerns Compound Market Jitters
Back home, investors were equally wary about the delayed finalisation of the government’s Rs1.25 trillion bank borrowing plan, which aims to address the Rs2.4 trillion circular debt in the energy sector.
Additionally, the recent cut in power tariffs, announced by Prime Minister Shehbaz Sharif as Rs7.41 per unit, failed to boost sentiment. Analysts noted that:
- Much of the relief is temporary,
- Core/base tariffs remain unchanged,
- Adjustments are mainly from fuel and quarterly cost revisions, not structural reforms.
Breakdown of the Rs7.41/unit relief:
- Rs1.71/unit: petroleum levy adjustment
- Rs1.90/unit: quarterly tariff adjustment (QTA)
- Rs1.36/unit: monthly fuel cost adjustment (FCA)
- Over Re1/unit: expected in upcoming quarterly adjustment
- Pre-tax actual relief: approx. Rs5.98/unit
Investors viewed the move as cosmetic relief, without long-term impact on the energy sector’s sustainability.
Outlook: Volatility Ahead
With global trade fears intensifying and local economic clarity lacking, the market is expected to remain volatile. Investors will be closely monitoring:
- Global tariff developments
- Government’s follow-through on energy reforms
- Finalisation of the borrowing plan
- Monetary and fiscal policy signals
The PSX may see short-term technical recoveries, but uncertainty remains the dominant sentiment in the near term.
