Pakistan Stock Exchange crashes as international oil prices fall

By Muhammad YaseenPublished On 05 Jan 2023

KARACHI – The stock market crashed in the early trading hours on Monday as confusion and uncertainty surrounding potential investors due to the decline in international oil prices by about 30 percent, the worst crash since the Gulf War in the 90s.

The Pakistan Stock Exchange’s (PSX) benchmark KSE 100-Share Index tumbled 2,291.69 points or 6pc around 10 am, before recovering to 36,862.34 in the afternoon. The apex of the day remained 38,219.67 (the previous close) and 35,917.34, the lowest.

Moreover, trade activity was suspended around 9:45 am after a rapid 5.83 percent decline in share prices was witnessed and resumed around 10.30 am.

Oil prices fell by as much as a third following Saudi Arabia’s move to start a price war after Russia balked at making the further steep output cuts proposed by OPEC to stabilize oil markets hit by worries over the global spread of the coronavirus.

Among other persisting factors, including the rout in global equities, the suspension of imports from China and the adverse effects on the Asian economy and sharper than expected downturn in world economies as the novel coronavirus outbreak continues to invade countries.

Investors last week continued to dump stocks and plough their money in safe-haven assets, mainly gold.

According to experts, the stock market has been searching for a proper direction for healthy growth but several factors continue to dominate the sentiments of potential investors.