PSX slips 1,000pts owing to downward trend over COVID-19

The Pakistan Stock Exchange (PSX) closed at 32,650 on Tuesday after shedding 1,000 points as brokers and traders continued to face uncertainty amid novel coronavirus health crisis.

The market rose to 33,894 points during the first eight minutes of trading but failed to maintain upward momentum and fell by 1,268 points. Towards the end of the day, however, the market made a slight recovery.

Today’s bearish spell marks a 20pc decline in the ongoing year and the market has lost 25pc from its peak on January 13. Deputy Head of Research at AKD Securities, Ali Asghar Poonwala, in its report about the day’s developments, termed the market’s trend “a sign of significant risk-off sentiments as broad-based sectoral declines — including mainboard banks, E&Ps and cements — feel the burden of global supply chain disruptions, demand slowdown at home and an expected extraordinary monetary easing”. The monetary policy is expected to be announced later today.

He said that the sharp increase in the number of coronavirus cases on Monday had “brought a sense of urgency to elicit a strong policy response both monetary and otherwise”.

“For an economy already in the midst of a slowdown, further downsides are apparent,” he added.

Poonawala revealed that orders placed with exporters were being cancelled or delayed, especially those from the European Union — which has been declared the new “epicentre” of COVID-19.

He predicted that the impact of supply disruptions from other countries, particularly from China, will likely take effect in the next few weeks.