The bourse witnessed a sharp decline on Monday as the KSE-100 Index went down by nearly 3,900 points, reflecting a severe loss of investor confidence driven by global market turmoil and unresolved domestic policy issues.
The Pakistan Stock Exchange (PSX)'s benchmark index settled at 114,909.48 points, down by 3,882.18 points or -3.27%, from the previous close of 118,791.66.
Earlier in the day, the KSE-100 had sunk to an intraday low of 110,103.97, reflecting a staggering drop of 8,687.69 points, or -7.31%. Even at its highest point of the session of 117,601.62, the index remained -1.00% below the previous close.
The sharp plunge prompted the PSX to impose a lower lock after the market declined by more than 5%. In an official announcement, the exchange said that all pending orders had been cancelled and trading would resume at 1:03pm.
Despite the break, selling pressure resumed once the market reopened, with the KSE-100 slipping further into red territory before recovering slightly.
Analysts pointed to both external and domestic triggers for the PSX’s sharp pullback.
“Investors are reacting to the uncertainty emanating from the Trump tariffs and in particular, its fallout both in the US and Asian Markets,” said Mustafa Mustansir, Director of Research and Business Development at Taurus Securities Limited.
“Apart from this, some of the negative sentiment also seems to have come from the delays in finalisation of the government’s bank borrowing plan to settle power sector circular debt.
Also, investors do not seem to have appreciated the cut in power tariffs as a major portion of these cuts is going to be temporary, with no adjustment to the base tariff,” he added.
Head of Research at Al Meezan Investment, Amreen Soorani, said: “The KSE-100 index has seen a substantial drop today during the market hours, losses exceeding 3% since the start of the session.”
“Contributing factors have been global market meltdowns, including concerns about international trade tensions, following a potential recession period,” she added.
Major stock indexes plunged in Asia as White House officials showed no sign of backing away from their sweeping tariff plans.
Japan's Nikkei sank 6% to hit lows last seen in late 2023, while South Korea dropped 5%. MSCI's broadest index of Asia-Pacific shares outside Japan fell 3.6%.
Chinese blue chips lost 4.4%, as markets waited to see if Beijing would respond with more stimulus. Taiwan's main index, which had been shut on Thursday and Friday, tumbled nearly 10%, leading policymakers to curb short selling.
In Saudi Arabia, where the markets were open Sunday, the bourse was down 6.78% — the worst daily loss since the COVID-19 pandemic, according to state media.
Adding to investor jitters was skepticism surrounding Prime Minister Shehbaz Sharif’s recent announcement of a Rs7.41 per unit reduction in electricity prices, which was initially celebrated as a significant step toward economic relief.
The breakdown of the Rs7.41 relief includes Rs1.71 per unit from petroleum levy adjustments, Rs1.90 per unit from quarterly tariff adjustments (QTA), and Rs1.36 per unit from monthly fuel cost adjustments (FCA), split between 46 paisa for one month and 90 paisa over three months.
An additional relief of over Re1 per unit is expected from the upcoming quarterly adjustment. This brings the actual pre-tax relief to around Rs5.98 per unit, with the remaining benefit arriving through tax-related deductions.
While the relief package was part of a broader effort to reform Pakistan’s ailing energy sector, investors remained cautious amid delays in the finalisation of the Rs1.25 trillion bank borrowing plan to tackle the Rs2.4 trillion circular debt.