PSX crashes 3,882 points as Trump tariffs spark recession fears

ISLAMABAD/ PARIS  -  The 100-Index of the Pakistan Stock Exchange (PSX) witnessed bearish trend on Monday, losing 3,882.17 points, a negative change of 3.27 percent, closing at 114,909.49 points as compared to 118,791.66 points on the last trading day.

Reportedly, trading was suspended at the Pakistan Stock Exchange (PSX) for an hour as the benchmark KSE-100 index plummeted by more than 8,000 points on Monday, triggered by the imposition of sweeping tariffs by the US. Financial analysts blamed the fear of a global recession for the massive fall in the stock exchange.

A total of 710,788,421 shares were traded during the day as compared to 553,668,391 shares the previous trading day, whereas the price of shares stood at Rs 43.023billion against Rs 35.492 billion on the last trad-ing day. As many as 450 companies transacted their shares in the stock market, 52 of them recorded gains and 357 sustained losses, whereas the share price of 41 companies remained unchanged.

The three top trading companies were WorldCall Telecom with 55,274,278 shares at Rs 1.28 per share, Cnergyico PK with 53,401,922 shares at Rs7.83 per share and Bank of Punjab 34,156,511 shares at Rs 10.39 per share.  Philip Morris (Pakistan) Limited witnessed a maximum increase of Rs 98.20 per share closing at Rs1,080.18 whereas runner-up was The Thal Industries Corporation Limited with Rs 24.28 rise in its share price to close at Rs 374.28.

Bata Pakistan Limited witnessed a maximum decrease of Rs 157.05 per share price, closing at Rs1,528.76, whereas the runner-up was Nestle Pakistan Limited with Rs 149.98 decline in its per share price to Rs 7,200.02.

A global stock market rout deepened on Monday and fears of recession rose after China retaliated against US President Donald Trump’s tariffs and Europe calibrated its response to the escalating trade war.

European equities were deep in the red but Asia fared worse, with Hong Kong’s Hang Seng index crashing 13.2 percent, its biggest drop since the 1997 Asian financial crisis, and Tokyo’s Nikkei 225 falling an eye-watering 7.8 percent.

A 10-percent “baseline” tariff on imports from around the world took effect on Saturday but a slew of countries will be hit by higher duties from Wednesday, with levies of 34 percent for Chinese goods and 20 percent for EU products.

While other countries weigh their options, Beijing announced last week its own 34-percent tariff on US goods, which will come into effect on Thursday.

The tit-for-tat duties “are aimed at bringing the United States back onto the right track of the multilateral trade system”, Chinese vice commerce minister Ling Ji said.

“The root cause of the tariff issue lies in the United States,” Ling told representatives of US companies on Sunday, according to his ministry.

EU trade ministers gathered in Luxembourg on Monday to discuss the bloc’s response, with Germany and France having advocated a tax targeting US tech giants.

“We must not exclude any option on goods, on services,” said French Trade Minister Laurent Saint-Martin.

The 27-nation bloc should “open the European toolbox, which is very comprehensive and can also be extremely aggressive”, he said.

German Economy Minister Robert Habeck likewise said Europe should be prepared to use its trade “bazooka” -- a new anti-coercion mechanism allowing it to punish any country using economic threats to exert pressure on the EU.

But signs of divergence already emerged, with Ireland, whose low corporate tax rate has at-tracted US tech and pharmaceutical companies, warning against that course of action.

Targeting services “would be an extraordinary escalation at a time when we must be working for de-escalation”, said Irish Trade Minister Simon Harris.

EU trade chief Maros Sefcovic said Europe was facing a “paradigm shift of the global trading system”.

US President Donald Trump has defended sweeping tariffs on imports that sent shockwaves through global stock markets, saying “sometimes you have to take medicine to fix something “.

Speaking to reporters aboard Air Force One late on Sunday, he said jobs and investment would return to the US to make it “wealthy like never before”. Trump’s top officials stressed that the tariffs - announced last week - would be implemented as planned, playing down recession fears.

US President Donald Trump cautioned against “stupid” panic on Monday as a global stock market rout deepened after Beijing retaliated against his tariffs offensive. Shares in New York joined the slump, with all three major US indices falling more than three percent in early trading.

European equities were deep in the red but Asia fared worse, with Hong Kong’s Hang Seng index crashing 13.2 percent, its biggest drop since the 1997 Asian financial crisis, and Tokyo’s Nikkei 225 falling an eye-watering 7.8 percent.

Minutes before the markets opened in New York, Trump posted that his tariff reforms were “a chance to do something that should have been done decades ago.” “Don’t be Weak! Don’t be Stupid!... Be Strong, Cou-rageous, and Patient, and GREATNESS will be the result!” he urged.

Trump threatened to further increase tariffs on China on Monday, raising the possibility of further escalation in a trade war that has already wiped trillions of dollars from global markets.

Trump said he would impose an additional 50% duty on U.S. imports from China on Wednesday if the world’s No. 2 economy did not withdraw the 34% tariffs it had imposed on U.S. products last week. Those Chinese tariffs had come in response to 34% “reciprocal” duties announced by Trump.

“All talks with China concerning their requested meetings with us will be terminated!” he wrote on social media. The announcement injected further turbulence into global financial markets, which have fallen stead-ily since Trump’s announcement. A 10% tariff took effect on all imports into the world’s largest consumer market on Saturday, and targeted duties of up to 50% are due to snap into place on Wednesday.(Nation)