KARACHI: The Pakistan Stock Exchange’s benchmark KSE-100 index plunged 2,106 points after the starting bell on the first day of the trading week, forcing authorities to halt trading for 45 minutes.
The index, which had closed at 38,220 points on Friday, nosedived at the start of the trading, shedding 2,106 points (5.51%) before trading was suspended.
The crash was triggered amidst a global sell-off on coronavirus fears and spreading contagion from a creeping economic slowdown, as well as a crude oil price war between Saudi Arabia and Russia.
Trading floors were a sea of red across Asia, with Tokyo, Sydney and Manila plunging around 6%, while Hong Kong shed 3.5% by lunch.
Mumbai, Singapore, Seoul, Jakarta and Wellington were more than 3% down, Shanghai and Taipei shed at least 2% and Bangkok gave up 5%. The losses tracked sharp falls in Europe and Wall Street on Friday.
“PSX has triggered a market halt at 9:37am which will last for 45 minutes,” the management wrote in a press release.
“The market halt is triggered as a standard protocol for risk management purposes,” a statement from the bourse said.
Silver lining
But some market analysts in Pakistan saw the plunge as a temporary setback.
Khurram Schehzad, CEO at Alpha Beta Core, noted that the market was under pressure after oil prices witnessed their biggest one-day drop.
“It is a big positive for Pakistan, as oil prices at these levels would result in $4-5 billion in savings,” he said.
“The outlook for the market is positive given the expected decline in [Pakistan’s] energy imports and trade deficit; inflation and interest rates; energy and leverage costs; potential to improve indirect taxes and reduced subsidy,” he explained.
Muhammad Sohail, CEO at Topline Securities, had similar views, noting hat the oil import bill could drop by $3-4bn a year as oil prices sink to multi-year lows.
“Lower oil prices and the declining trend in inflation numbers hint at an early rate cut, which would be a big positive for the market,” he said.
