Investment Portfolio Management

Reasons for decline in PSX

Submitted to: Mr. Syed Mubashir Ali Shah

Submitted by:

Iqra Safdar

BSBA-VIII (B)

04151613058
What are the reasons of decline in stock market?

As coronavirus cases kept on emerging in various parts of the country on Monday, the Pakistan
Stock Exchange (PSX) declined by over 2,400 points. 

A total of 215,437,490 shares were traded compared to the trade 290,470,770 shares during the
previous day, whereas the value of shares traded during the day stood at 8.060 billion as
compared to Rs 13.968 billion during last trading day.

As many as 346 companies’ transacted shares in the Stock Market Monday, out of which 18
recorded gain and 319 sustained losses whereas the share price of 9 companies remained
unchanged.

The main reason of decline of stock market is that the Investors are preferring cash over equity.
The market lost Rs382 billion in capitalization. The report says the market trade for the day stood
at 215 million shares, which translates into Rs.8 billion.

Equity markets across the world continue to bleed over fears of the economic implications of the
COVID-19, which the World Health Organization declared as a global pandemic.

Another reason of market dropped is due to lower regional markets, lower commodity prices and
predicted circumstances and threats to Pakistan’s economy from corona virus.

One more reason is oil prices war between Saudi Arabia and Russia. Saudi Arabia reduces the oil
price for Russia in the result Russia also reduces oil prices. When oil prices decrease as world
economy is based on oil the whole business activities become slow and it may also affect the
stock market and the result in growth of the stock market become slow.