Karachi, March 21, 2020: Although the word ‘bloodbath’ has been used quite liberally in recent times, in its literal sense, few occasions would justify its true application.
However, after what has happened this week at the local bourse, we wouldn’t begrudge anyone for using this adjective to describe events that transpired. The KSE-100 plunged by 15 percent WoW to close at 30,667 levels, the largest percentage decline since the global financial crisis.
This time, it has been a pandemic that plagued global economies, with Pakistan failing to become an exception. Panic selling was triggered (leading to frequent halts along the way) by any news of surging cases of Coronavirus in Pakistan, lockdowns of shops/offices in major cities, and companies deciding to employ a work-from-home formula to encourage self-isolation.
Amid the gloom, oil took a battering, down ~20 percent WoW at ~US$27/bbl (WTI), reaching multi-decade lows. On a much-needed positive note (if you could call it that), the current account deficit (CAD) shrank by 61 percent MoM in Feb-2020.
More importantly, a pullback was also on the cards after the constant hammering and it was further boosted by news/rumours of an economic package that could be announced shortly by the government.