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The Pakistan Stock Exchange (PSX) faced a historic meltdown on April 7, 2025, as the benchmark KSE-100 index plunged more than 8,400 points, causing widespread panic among investors and triggering automatic market suspension.
Trading was halted after the index dropped over 6,000 points, in line with market regulations designed to prevent excessive volatility. Trading was paused for 30 minutes to give investors time to assess the situation.
By 11:39 AM, the KSE-100 index had fallen 4,411.07 points, a 3.71 percent decrease, settling at 114,380.59 points. The market had opened strong at 117,601.62 points, but selling pressure quickly took over, pushing the index to its lowest point of the day at 114,380.59.
Despite strong annual gains of over 64 percent in the past year, the year-to-date (YTD) performance of the index turned negative at -0.65 percent.
Just a day earlier, the index had closed at 118,791.66.
Earlier in the day, by 10:09 AM, the KSE-100 had already dropped 3,377.57 points (2.84 percent), trading at 115,414.09, indicating the early signs of a market-wide correction.
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Trading volume at that time had reached 63.14 million shares, with total volume later crossing 147 million shares – a clear indication of investor panic and heavy sell-off activity.
The steep decline triggered margin calls, adding further pressure to investors who had borrowed money to invest in stocks.
Brokers demanded that traders either deposit additional funds or securities to maintain required balances in their accounts. The quick drop left many traders struggling to meet capital requirements, making it one of the most turbulent days in PSX history.
Reasons Behind the Crash
- Market analysts pointed to a combination of factors behind the crash. These include:
- Political uncertainty in the country
- Macroeconomic instability
- Global market trends
- Investor fear over upcoming economic data and corporate earnings reports
These factors together created an environment of caution and panic selling, as investors looked to exit positions amid a falling market.
Market Outlook
Despite the setback, analysts remain hopeful that the market can recover in the medium term, depending on how political and economic conditions stabilize.
The 52-week range of the index remains wide – between 68,710.50 and 120,796.67 points – leaving room for potential rebound if investor confidence returns.
For now, investors are advised to remain cautious and follow market updates closely as trading resumes after the 30-minute suspension.
