Pakistan Market Crashed amid U.S Tariff War

Staff Report

Following global market crash Pakistan Market lost 3.3% on Monday owing to the escalating tariff war initiated by USA and subsequently retaliated by other nations. After hitting a Halt when it fell 5% trading resumed after cooling period and saw some value buying

At sector level, Oil and Gas exploration sector, Technology, and Textile sector are expected to be affected as these are either linked to the global commodity prices (like crude oil) or linked with global aggregate demand.

On the other hand, amidst lower oil prices, the inflation might ease down and can help reducing interest rates further, which may result in lower earnings of the Banks going forward as well.

On macro side, every $10/barrel decline in oil prices results in import bill saving of US$2bn for crude oil, refined oil (petrol diesel), and RLNG import. Assuming decline of 5-10% in textile exports to USA (which is US$250-500mn), the country will save net US$1-1.5bn in import bill.

Carnage at the Local Bourse

A brutal day at the Pakistan Stock Exchange (PSX) as the market mirrored the global sell-off, opening on a sharply negative note and experiencing relentless selling pressure throughout the day. The benchmark index nosedived to an intraday low of 8,687 points, registering the largest intraday point-wise drop in PSX history.

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.

In response to the extreme volatility, trading was temporarily halted for one hour, triggered by the KSE-30 index falling more than 5% for five consecutive minutes, activating the market’s circuit breaker mechanism.

However, some stability returned during the later hours as value hunters stepped in, helping the index recover part of the losses. The session eventually closed at 114,909 points, down by 3,882 points or 3.27%.

The major drag on the index came from ENGROH, OGDC, PPL, HUBC, and PSO, which collectively contributed a negative impact of 1,247 points.

Traded value wise PSO (Rs.4.2bn), MARI (Rs.2.73bn), OGDC (Rs.2.45bn), MLCF (Rs.1.92bn) and HUBC (Rs.1.89bn) dominated the trading activity.

Total market participation remained robust, with a traded volume of 702 million shares and a traded value of Rs. 42.7 billion.