April 7, 2025 – Karachi: The Pakistan Stock Exchange (PSX) was badly hit on Monday by one of the biggest downturns in history when the KSE-100 index fell by more than 3,000 points. The drop is said to be caused by the U.S. government’s decision to impose new tariffs globally.

PSX Falls as Global Trade War Show Shocks

At the closing bell, the KSE-100 index stood at 114,909.48 after it had lost 3.27% during the day. Intraday trading saw the order book collapse to as low as 110,103.97; the latter figure reflects a 7.31% loss before a quick recovery partially. The sharp decline in the market index triggered a trading break temporarily, after the break 5% was gone, which sets the circuit breakers for the whole market.

The experts say that this is the aftereffect of increasing global trade friction caused by the U.S. administration individually imposing protectionist tariffs on imports from a large number of countries, for example, Pakistan. These nationalist moves have set off the recession alarm.

Many industries have reported quite massive losses because of the edge of tariffs, worries are many, too. Market players even voiced fear of long-term impacts on the economy of Pakistan; the fact that the country’s export-oriented economy might hesitate as the main customers might turn their backs on the country’s textile products is indeed the immediate concern.

Given the fluctuation in the market, the Securities and Exchange Commission of Pakistan (SECP) has committed to closely following this trend and taking necessary actions. Through this settlement, the SECP has moved forward to warn the investors of the increasingly unstable and uncertain market and has hence also stressed the importance of having a long-term investment strategy among such confusion.

According to the ongoing reaction from global markets over trade policies, Pakistani officials are said to have been looking for diplomatic channels to negotiate and gain relief from the existing tariffs. Mainly, the government is concentrating on the reduction of the societal impact of the national economy and the regulation of the investment sentiment in the financial markets.

The period of the upcoming weeks is going to be crucial for deciding the future of PSX and the wider economic consequences for Pakistan during the time of the world trade tensions.