Nerve-biting bourse

Fear and unpredictability ruled the roost as bears and bulls took to the woods. After more than four months, it was a day of desperation at PSX as stocks plunged by 3,882 points on Monday. Even a circuit-break of an hour could not breed in confidence, as investors and traders were jittery and panic selling was witnessed with a further slump of 2,000 points.

The crest and troughs have a lot to do with international pressure as a trade war is round the corner in the backdrop of punitive tariffs that the Trump administration has slapped across the globe. Monday's volatility was apparently owing to the devil in the details that would unfurl as China comes up with its retaliatory strategy on tariffs.

Analysts and economic gurus were unanimous in terming it a "historic day-on-day decline", and they foresaw more to come. The impact factor was so lethal that sovereign bonds of a number of frontier markets suffered sharp sell-offs, and longer-dated dollar-denominated bonds issued by Pakistan dropped more than 13 cents.

Overall, the PSX was decimated by 3.27% on the fateful day to culminate at 114,909.48 from the previous close of 118,791.66. The trend was evident across the region as Indian stocks too took a dip by more than 3%, whereas Asian markets struggled to end in conformity. This weakness factor is likely to prevail for days and weeks to come and is being seen as a prelude to an impending global recession.

Pakistan by virtue of being a trading hub of products that have an inevitable linkage to imports and exports, such as oil and petroleum products, is likely to feel the pinch as long as this tariff offensive continues.

On the broader front, a plausible decline in global commodity prices is on the cards, as Beijing is likely to impose retaliatory levies of 34% on all US goods from April 10. This externally triggered unrest is set to graduate to new heights as the US has imposed controls on seven rare earth metals, including gadolinium and yttrium, which will have a devastating cost spiral on medical diagnosis and consumer electronics.