Shares at PSX surge 1,800 points in all-time high in intraday trade

Bulls continued their stampede on the trade floor on Friday as shares at the Pakistan Stock Exchange (PSX) surged more than 1,800 points in an all-time high in intraday trade.

The benchmark KSE-100 index surged 1,855.30, or 1.56 per cent, to stand at 120,793.41 from the previous close of 118,938.11 at 9:59am.

Mohammed Sohail, chief executive of Topline Securities, told Dawn.com that despite falling global markets, the index crossed the 120,000 barrier “amid expectations of better earnings after government cut power rates” as well as the promise to resolve circular debt.

Yousuf M. Farooq, director research at Chase Securities, noted that the market had largely shrugged off US-imposed tariffs and instead celebrated the decline in electricity prices.

Yesterday, Prime Minister Shehbaz Sharif announced a Rs7.41 per unit cut in power rates across the country in a “major” relief package to reduce the burden on citizens facing exorbitant electricity bills.

For industries, he declared that electricity prices would be cut by Rs7.69.

Farooq said: “Additionally, lower crude and coal prices have further buoyed sentiment around equities”, adding that inflation expectations had eased further in response to falling energy costs.

“As these expectations decline, the market is likely to anticipate a gradual re-rating driven by the potential for lower interest rates in the future,” he highlighted.

Regarding US tariffs, he noted, “While Pakistan is not as directly exposed to the US as other countries, it remains important to monitor the second-round effects of these tariffs — particularly the potential slowdown in key trading partners and a possible dip in remittance inflows.”

US President Donald Trump on Thursday imposed a 29pc tariff on goods the United States imports from Pakistan, along with duties on dozens of countries from rivals to allies, intensifying a global trade war.

According to Topline Securities, Pakistan’s exports accounted for 0.16pc of total US imports of $3.36 trillion in 2024.

It highlighted that countries such as Vietnam, Bangladesh, Sri Lanka and India had shares of 4.2pc, 0.26pc, 0.09pc and 2.7pc.

“Although imports from Pakistan in US makes only 0.16pc of total US Imports, however, the number is quite significant from Pakistan’s perspective,” it stated. “Pakistan exports to US are $6bn annually, 18pc of total exports of the country.”

Additionally, it said that textile comprises 75 to 80pc of Pakistan’s exports to US.

While other exported commodities include leather, surgical goods, rice, cement, steel products, and salt.

Earlier, shares had reached an all-time high of 118,000 points following the prime minister’s announcement of a “major” power relief package to reduce the burden on citizens.

Trump tariffs sow fears of trade wars, recession and a $2,300 iPhone

Countries around the world threatened to wage a trade war with the United States as President Donald Trump’s sweeping tariffs fed expectations for a global downturn and sharp price hikes for swathes of goods in the world’s biggest consumer market.

The penalties announced by Trump triggered a plunge in world financial markets and drew condemnation from other leaders reckoning with the end of a decades-long era of trade liberalisation.

In Japan, one of United States’ top trading partners, Prime Minister Shigeru Ishiba said that the tariffs had created a “national crisis” as a plunge in banking shares set Tokyo’s stock market on course for its worst week in years.

Investment bank JP Morgan said it now sees a 60pc chance of the global economy entering recession by year end, up from 40pc previously.

But there were conflicting messages from the White House about whether the tariffs were meant to be permanent or were a tactic to win concessions, with Trump saying they “give us great power to negotiate”.

The US tariffs would amount to the highest trade barriers in more than a century: a 10pc baseline tariff on all imports and higher targeted duties on dozens of countries.

That could jack up the price for US shoppers of everything from cannabis to running shoes to Apple’s iPhone. A high-end iPhone could cost nearly $2,300 if Apple passes the costs on to consumers, based on projections from Rosenblatt Securities.

Businesses raced to adjust. Automaker Stellantis STLMA.MI said it would temporarily lay off US workers and close plants in Canada and Mexico, while General Motors GM.N said it would increase US production.

Canadian Prime Minister Mark Carney said the United States had abandoned its historic role as a champion of international economic cooperation.

“The global economy is fundamentally different today than it was yesterday,” he said as he announced several countermeasures.

Elsewhere, China vowed retaliation for Trump’s 54pc tariffs on imports from the world’s No. 2 economy, as did the European Union, which faces a 20pc duty.

French President Emmanuel Macron called for European countries to suspend investment in the United States.

But Washington’s allies and rivals alike warned of a devastating blow to global trade.

The tariffs “clearly represent a significant risk to the global outlook at a time of sluggish growth,” said IMF Managing Director Kristalina Georgieva, calling on Washington to work to resolve trade tensions with its partners and reduce uncertainty.

Stocks suffered a global meltdown, the US dollar crumbled and oil prices were set for their worst week in months as analysts warned the tariffs could dent demand, upend supply chains and hurt corporate profits.

The Dow fell nearly 4pc, its biggest one-day percentage loss since June 2020. The S&P 500 lost nearly 5pc and the tech-heavy Nasdaq declined nearly 6pc, its worst day in percentage terms since the pandemic era of March 2020.

American companies with significant overseas production took a hit. Nike shares lost 14pc and Apple fell 9pc.

The pain for markets continued into Friday, with Japan’s Nikkei set for its biggest weekly drop in five years in a rout led by stocks in Japanese banks, some of the biggest lenders in the world by assets.

Japanese bond yields, meanwhile, fell sharply as investors bet the Bank of Japan may be forced to rethink its plans to raise interest rates.

Trump says the “reciprocal” tariffs are a response to barriers put on US goods, while administration officials said the tariffs would create manufacturing jobs at home and open up export markets abroad, although they cautioned it would take time to see results.

“The tariff plan does not appear to be well thought-out. Trade negotiations are a highly technical discipline, and in our view these proposals do not offer a serious basis for negotiations with any country,” said James Lucier, founding partner at Capital Alpha.

Economists say the tariffs could reignite inflation, raise the risk of a US recession and boost costs for the average US family by thousands of dollars.

Analysts said the tariffs could also alienate allies in Asia and undercut strategic efforts to contain China.

Trump has slapped a 24pc tariff on Japan and a 25pc tariff on South Korea, both home to major US military bases. He also hit Taiwan with a 32pc tariff as the island faces increased military pressure from China.

Canada and Mexico, the largest US trading partners, were not hit with targeted tariffs on Wednesday, but they already face 25pc tariffs on many goods and now face a separate set of tariffs on auto imports.

Oil set for worst week in months over Trump’s tariff blow

Oil prices fell over 1pc, and were on track for the worst week in months over US President Donald Trump’s new tariffs, stoking concerns that a global trade war could hurt oil demand.

Brent futures LCOc1 fell 76 cents to $69.38 a barrel by 0532 GMT, while US West Texas Intermediate crude futures CLc1 were down 78 cents, or 0.5pc, to $66.13. Brent was on course for its biggest weekly loss in percentage terms since the week ended October 14, and WTI since the week ended January 21.

While the highly anticipated tariff announcement by Trump sank crude prices, the impact was more severe elsewhere. Investors scrambled to the safety of bonds, the Japanese yen and gold, as the news sent shockwaves through global financial markets.

The dollar index, which measures the US currency against six other units, fell to 102.98, its lowest since mid-October.

“Weakness is appearing in longer dated futures contracts. Both the six month and 12 month spreads have contracted sharply,” analysts at BMI said in a note on Friday.

“The tariffs have hit hardest on key Asian emerging economies that represent a significant market for oil consumption growth.”

Adding to the bearish sentiment was a decision by the Organisation of Petroleum Exporting Countries and their allies (OPEC+) to advance their plan for oil output increases, with the organisation now aiming to return 411,000 barrels per day to the market in May, up from 135,000 bpd as initially planned.

More to follow