Stock market crash

The shares at Pakistan Stock Exchange took a hammering once again as the KSE-100 index plunged by 1,716 points yesterday. The stock market was also halted for 45 minutes after a similar measure was adopted during Monday’s bloodbath. However, when trading resumed the selling pressure increased causing the market to drop by 4.53 percent.

Global financial markets also witnessed a free-fall in share prices. Germany’s Dex –Europe’s biggest market – slumped by 5.89 percent, whereas Amsterdam market collapsed by 6.25 percent. Financial markets of Moscow and Sydney showed a downward trajectory with 9.72 percent and 7.72 percent respectively. Tokyo dropped more than 5pc, while Bangkok crashed with 8 percent. Australia’s ASX was down 5.4 percent, while Hong Kong tumbled three percent at the open.

If we look at the past days of the Pakistan Stock Market, we observe that the stock market has gone down by almost 11.32 percent. The US dollar has also appreciated as compared to the rupee and is been traded at Rs159.30 in inter-bank as compared to the greenback.

The downward trajectory of global financial markets is caused by the aggravated worries of coronavirus around the world. The new virus has spread to over 100 countries and has claimed the lives of 4,500 people. Another reason for yesterday’s market crash was that United States President Donald Trump has suspended travel from Europe in a dramatic way.

The novel coronavirus has increased globally and has badly affected world markets, whereas the number of cases in China is declining day by day showing that containment efforts are working. The growth of the economy worldwide has been slowed down fear looming fears of a recession.

In this regard, if the situation remains the same then Pakistan’s trade will further decrease along with a decline in exports making it difficult for the crippled economy of Pakistan. Economic pressure will build up in Pakistan cause further inflation and economic burden on the people.

However, in this current situation of the international oil market – which is also witnessing a downward trend – Pakistan can acquire benefits with the right decisions. As Pakistan’s major chunk of foreign expenditures is on oil imports, the country can acquire oil at low prices and increase reserve tanks.

Some are still gaining a profit in the present situation of Pakistan stock market slump with strategic planning. Presently, the market has too much fluctuation and is unpredictable. Hereof, I would advise the people to only participate in the shares market if they have some knowledge of risk management or else they would be destroyed. The global financial market will continue its bearish trend until the threat of the deadly virus does subside from the world.