KSE-100: Single largest slump in history of over 2,000 points

Karachi: Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Share Index plunged in early hours of the first day of the business week.

PSX recorded the single largest slump in history of over 2,000 points and reached 35,927.98 as of 10.34 am. In the first few minutes after the start of trading, the index fell 2,106.78 points or 5.51%.

Investors dumped shares and ran out of the market as they took cues from tumbling global stock markets and the worst crash since the Gulf war in 1991.

“PSX has triggered a market halt at 9:37 am which will last for 45 minutes,” the management wrote in a press release.

According to the new PSX rules, both indices and individual stocks can plunge or spike maximum by 7 per cent in a day. Previously, the limits were capped at 5% either side.

What is Market Halt?

“Market halt” procedure has been introduced by the Securities and Exchange Commission of Pakistan (SECP) in PSX regulations in December 2019. The action triggers when the KSE-30 index moves 4 % either way and remains there for 5 consecutive minutes.

The objective of introducing market halt is to safeguard investors and market participants during volatile markets. During this halt, trading in all securities remains temporarily suspended in order to ensure a cooling off period and run a mark to market activity as a risk management measure.

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The trouble has been hit by worried over the global spread of coronavirus and the oil markets were also affected by the novel virus besides Saudi Arabia’s move to start a price war after Russia going to make further steep output cuts proposed by OPEC to stabilize oil markets.

Moreover, the other factors including a panic in global equities and suspension of imports from China and the adverse affects on Asian economy. Furthermore, sharper than expected downturn in international economies because of coronavirus continued to invade countries.