Today the KSE100 closed in the negative zone as the regional markets were also down in the negative zone.
The Indian markets more then 12% intraday also caused panic selling at the KSE100.
Selling was witnessed in almost all the sectors.
The most selling was witnessed in oil and gas exploration sector followed by commercial banks and technology and communication sectors.
KSE 100 closed at 13759.50 with a negative change of 90.53 points (-0.65%)
KSE 30 closed at 16404.83 with a negative change of 99.94 points (-0.61%)
"We will be looking at the performance of the indian and asian markets which will decide the direction of the Capital Markets in Pakistan," said Dealers at KSE.
KARACHI, Jan 22 (Reuters) - Pakistani shares shed nearly two percent in early trade on Tuesday following a decline in global markets on fears of a U.S. recession, dealers said.
"Market is weak due to the international pressure and fear that foreign investors may sell further," said Sajjad Mankani, head of sales at BMA Capital Management Ltd.
Stocks tumbled across Asia and U.S. stock index futures sank as panic gripped markets that a U.S. recession could derail economic growth, sending investors fleeing to safe haven government bonds.
According to the central bank data, there was a net foreign outflow of $72.887 million for the first 18 days of January.
Looking at the situation in the U.S, Major countries are now fearing that U.S might go into an economic recession phase.
European and Asian countries are fearing that the weakening of dollar against Major currencies will have an impact on their exports to U.S. As Reuters has also indicated that now investors are investing in Government Bonds to safe guard their investments. A common tool called Hedging.
The drop in International Oil prices just manging above $ 88 / bbl has also indicated that the energy stock piles in the U.S has also dropped down forcing investors to sell in energy stocks and invest in Gold which gave support on $ 860.50/oz for the time being. Earlier on we did witnessed selling from Gold as well, as it reached to high levels breaching $900/oz levels earlier in Jan 08.
Headlines from local newspapers
President Musharaf has turned down the proposal for a change in the policy of subsidizing petroleum products and directed the government not to revise the oil prices before the general election scheduled for February 18 (BR)
External debt of the country is likely to reach US$46.6bn by the end of FY12 from US$39.6bn by the end of FY08(DT)
Cement exports to Russia are expected to resume in the wake of cut in the local consumption due to a likely decrease of 15% in the Public Sector Development Program (TN)
Stocks plunged across the world yesterday, with markets in Europe, Asia and Latin America tumbling by up to 7% as investors feared a global recession (Dawn)
The Supreme Court has called a report from the State Bank of Pakistan about PRs54.0bn bank loans reportedly written off by the outgoing government in the last five years (BR)
The value of Pakistani cement exports to India has fallen from US$74 to US$70 per ton during the last few weeks due to competition amongst exporters (DT)