In an unprecedented turn of events, the Pakistan Stock Exchange (PSX) experienced a massive plunge on Thursday, with the benchmark KSE-100 index falling by 5,000 points in a single trading session. The sharp decline has left investors reeling, wiping out billions in market capitalization.
The KSE-100 index, which started the day at a robust level, closed at 88,000 points, marking one of the steepest one-day declines in the exchange’s history. The sell-off was triggered by a combination of political instability, concerns over the country’s economic policies, and a sudden withdrawal of foreign investments.
Reasons Behind the Collapse
- Uncertainty in Policy: Investors expressed concerns about the government’s unclear stance on taxation and trade policies, creating panic in the market.
- Rupee Depreciation: The Pakistani rupee’s continued weakening against the US dollar added to fears of economic instability.
- Global Market Sentiments: A slump in regional markets, fueled by geopolitical tensions, further dampened investor confidence.
Impact on the Economy
Economists warn that the historic drop could have far-reaching consequences for Pakistan’s already struggling economy. “This is a wake-up call for the government to address key structural issues,” said financial analyst Shahid Ali.
Small investors have been hit the hardest, with many seeing their savings eroded in a matter of hours. “I’ve lost everything I had in stocks,” lamented an investor from Karachi.
Government’s Response
In an emergency press briefing, Finance Minister Ishaq Dar reassured the public that measures are being taken to stabilize the market. “We are closely monitoring the situation and will unveil a comprehensive recovery plan soon,” he said.
Experts Urge Caution
Market analysts are urging calm, emphasizing the need for long-term reforms to restore investor confidence. “The market will rebound, but only if the government demonstrates fiscal discipline and clarity,” said Ayesha Khan, a senior market strategist.
The PSX has announced it will remain operational on Friday, but trading limits are expected to be tightened to prevent further panic selling.
