Pakistan stock exchange plunges amid escalating trade tensions

On April 10, 2025, the Pakistan Stock Exchange (PSX) experienced a significant decline as a result of the increasing tensions in the global trade environment. This downturn was notably influenced by the enforcement of new US tariffs, which have generated retaliatory measures from international rivals, particularly affecting investor sentiment across global markets. As the PSX resumed a downward trend, the benchmark KSE-100 index witnessed a drastic fall, reaching a low of 114,153 points after losing about 1,379 points, marking a decrease of 1.19 percent from the previous day. The drop was particularly attributed to major financial entities like United Bank Ltd, Engro Corporation, Oil and Gas Development Company, Pakistan Petroleum Ltd, and Systems Ltd, which collectively accounted for a loss of 639 points. Market analysts from Topline Securities Ltd indicated that the ongoing uncertainty surrounding US tariff measures has had a destabilizing impact on both regional and global equities. Despite a brief mid-session recovery, the broader negative trend persisted throughout the trading day. Ahsan Mehanti from Arif Habib Corporation remarked that the market downturn mirrored a broader sell-off in international financial markets, fueled by a backdrop of declining crude oil prices and a depreciating rupee. This environment has created prevalent bearish sentiments among investors, who are increasingly concerned about the potential repercussions of US tariffs on Pakistani exports. The enforcement of tariffs—specifically a notable 104 percent tariff on Chinese imports—exacerbated the tensions and concerns about a slowing global economy, which investors feared could lead to recession risks. Although analysts suggested that the decline in international prices might offset potential losses in exports and remittances due to this trade war dynamic, the immediate sentiment at the PSX has been decidedly negative, contributing to heightened volatility in trading activity where approximately 446.6 million shares were exchanged, amounting to Rs26.5 billion.