Shares at PSX plummet by 6,200 points after global market crash on 'Black Monday'

Shares at the Pakistan Stock Exchange (PSX) plummeted by more than 6,200 points on Monday as global markets suffered heavy losses on what is being dubbed "Black Monday," driven by fears of a US-China trade war and a potential global recession.

The benchmark KSE-100 index lost 6287.22 points or 5.29% at 12:00 pm to stand at 197,738,120. The previous close was recorded at 118,791.66.

Notably, the market had crossed the 120,000-point milestone on Friday, after Prime Minister Shehbaz Sharif’s announcement of a reduction in electricity tariffs.

Director Research AKD Security Awais Ashraf linked the decline to concerns surrounding the tariff cut, as investors feared it could negatively impact business sentiment in Pakistan.

Read: KSE-100 reaches historic 120,000 points after power tariff reduction

However, Ashraf also saw the US-imposed tariff as a positive development for Pakistan, stating that as an import-led economy, Pakistan might gain from this because of the expected drop in global commodity prices.

Yousuf M Farooq of Chase Security attributed the fall to fears of global recession, noting that it was a modest drop compared to other regional markets. 

However, Farooq highlighted strong selling pressure particularly in oil and banking stocks.

Read: Karachi's business community observes shutter down strike in solidarity with Palestine

He said that the US trade policy's impact on Pakistan might be neutral or even positive in the long run despite short-term risks to the textile sector, especially if global commodity prices remain low.

He stated the government needs to swiftly negotiate with the US to lift tariffs on Pakistani products. This urgency stems from the potentially devastating impact of US tariffs on Pakistan's exports, particularly in the textile and apparel industries.