The Pakistan Stock Exchange (PSX) witnessed a sharp decline on Monday as the benchmark KSE-100 Index went down by more than 3,000 points during early trading hours. The index had dropped 115,488.18, reflecting a drop of 3,303.48 points, or 2.78%. It had touched a high of 117,601.62, still down by 1,190.04 points (1.00%) from the previous close of 118,791.66. Economists, attributed the decline to \u201cinvestors fears that tariff hikes could lead to global recession through weaker demand\u201d. \u201cWe believe being an import-led economy, the imposition of US tariffs would benefit us due to possible decline in global commodity prices,\u201d they added. they said, \u201cContagion. Markets are broadly down on fears of a global recession. \u201cHowever, the KSE-100 Index has declined by only 2.5pc \u2014 a relatively modest drop compared to other regional markets,\u201d they said. Economists noted that there was notable selling pressure in oil and banking stocks. \u201cLower oil prices are expected to negatively impact earnings for oil exploration companies,\u201d they stated, highlighting that at the same time, textile exporters could \u201cface headwinds from new US tariffs\u201d. \u201cWhile these tariffs pose short-term risks, particularly for the textile sector, the overall impact of US trade policy may prove neutral to positive for Pakistan \u2014especially if commodity prices stay low,\u201d Economists added. In the short term, he remarked that the textile sector could face profitability challenges due to both direct and indirect (first and second round) impact. \u201cHowever, lower global commodity prices may help ease inflationary pressures domestically, potentially leading to lower interest rates,\u201d they said. \u201cThis, in turn, could support a gradual recovery in valuations.\u201d On the government\u2019s role, they stressed that the federal government would have to \u201cmove quickly and start negotiations for the removal of tariffs from Pakistani products\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
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