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Tuesday, May 21, 2024

Stocks at PSX yoyo over coronavirus menace

The recent stock market downturn had wiped off $11.3 trillion from global valuations. Pakistan Stock Exchange witnessed seesaw situation as it recovered yesterdays lossess but plunged again this morning. How will it impact the Pakistani people and business? Also know what is happening around the world in terms of economy.

Pakistan Stock Exchange (PSX) experiences seesaw situation today due to coronavirus threat. The KSE-100 Index gained some points that it lost yesterday but plunged again in the opening hour which led to a halt of trading. The trading was halted for the third time in last 7 days as authorities foresaw risk. Soon after resumption, it lost over 1,680.

Trade was halted for 45 minutes after the stock exchange witnessed bearish trend
today and the 100-Index initially lost 1,682 points. However, it recovered some
of its losses after trade was resumed.

On the other hand, the value of the US dollar is continuing to surge against the
Pakistani rupee as the greenback has gained three percent in past few days. The
instability after hike in the dollar rates has further increased the
reservations of the business community. Currently, US dollar is being traded at 160 Pakisani Rupees.

Lahore Chamber of Commerce and Industry (LCCI) President Irfan Iqbal Sheikh said
the dollar prices have increased due to coronavirus and Pakistani exporters can
take benefit from the situation.

It is to be mentioned here that the surge in the dollar prices is on one hand
increasing national debt of Pakistan, and on the other it is affecting the
business activities.

Nevertheless, raw material imported will also increase inflation as rupee devalues.

On Thursday, PSX witnessed bloodbath as US has banned Europe travel over coronavirus fear. It led to the collapse of many markets across the world.

Stocks see worst slump in decades as Trump ban bites

Equity markets plunged Thursday, with some recording their worst day in decades, after the US banned travel from Europe and the ECB failed to stem the selling tide.

The oil price also fell sharply as the move ramped up fears of a worldwide recession.

The European Central Bank failed to calm nervous investors despite unveiling measures to support the economy.

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Markets lived through “a horror show”, said Connor Campbell, an analyst at Spreadex. The travel ban was heightening “the likelihood of a global recession”, he said.

Across the world, stock markets saw daily plunges not seen in decades, if ever.

Worst since 80s

London recorded its worst day since the 1987 crash and Frankfurt its blackest day since 1989, the year the Berlin Wall fell.

Paris suffered its worst one-day loss ever.

Tokyo entered bear territory, and Sydney saw its worst session since the 2008 global financial crisis.

The European Central Bank ramped up its super-cheap bank lending programme and other stimulus measures, but its failure to lower interest rates sparked further selling.

Milan stocks fell by 16.9 percent as Italy went into lockdown.

On Wall Street, the Dow tumbled more than eight percent in early trading, triggering a 15-minute suspension in trading at one point, before paring losses when the New York Fed announced a big liquidity injection into the banking system.

Travel and tourism have been particularly hard-hit as countries institute travel bans and quarantine requirements, with airline stocks nosediving.

The recent stock market downturn had wiped off $11.3 trillion from global valuations as of the end of Wednesday, according to Howard Silverblatt, a senior analyst at S&P Dow Jones Indices.

Read more: Garlic cures coronavirus: Garlic prices shoot up

Oil prices were also hammered, with benchmark Brent North Sea crude losing more than eight percent as a slowing economy was expected to dampen demand for petroleum and Saudi was fuelling a price war.

“We are now staring at the whole world going into a lockdown,” Vandana Hari, of Vanda Insights, said. “Oil demand can be expected to crash through the floor and all previous projections on oil consumption are now out the door.”