The Pakistan Stock Exchange (PSX) experienced renewed selling pressure on Wednesday, with the benchmark KSE-100 Index dropping nearly 1,200 points during the early trading hours.

By 10:49am, the index was recorded at 112,891, showing a decline of 2,640 points, or 0.94%.**

Broad-based selling affected several key sectors, including automobile assemblers, cement, chemicals, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs), power generation, and refining. Major stocks such as MARI, POL, PPL, PSO, SNGPL, SSGC, ARL, MCB, NBP, and UBL all traded in the negative territory.

In contrast, the PSX had shown a rebound on Tuesday, with the KSE-100 Index gaining 623 points, or 0.54%, to close at 115,532.43, driven by broad gains across multiple sectors in line with positive global market trends.

Internationally, stock indexes in Asia tumbled on Wednesday following the implementation of hefty 104% tariffs on China imposed by President Donald Trump. Additionally, a significant selloff in US Treasuries raised concerns about foreign funds moving away from US assets.

The US dollar weakened against safe-haven currencies, while the onshore yuan remained slightly above its lowest level since late 2007, as China allowed further depreciation in response to the escalating trade war with the US. The oil market was not spared from the downturn, with prices falling nearly 4%.

The negative sentiment is expected to extend to Europe, as EUROSTOXX 50 futures indicated a 3.7% drop at the market open. Similarly, both S&P 500 futures and Nasdaq futures fell by 1.6%.

Washington confirmed that the 104% tariffs on imports from China would officially take effect at 12:01am Eastern Time (0401 GMT), continuing the turbulent trade negotiations without any new developments.

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Amidst the backdrop of shifting tariff headlines and the potential for a prolonged trade war between the US and China, financial markets faced sharp volatility.

The S&P 500 witnessed one of its largest reversals in 50 years, losing 4.2 percentage points from an initial positive start to finish negatively, translating to a staggering $5.8 trillion decline in stock market value over four days.

In Asia, the MSCI index tracking shares outside Japan fell by 1.9%, with other major markets also in the red. Japan’s Nikkei Index dropped 3.6%, following a 6% rally earlier in hopes of a trade deal with the US, while Taiwanese stocks declined 4.6% despite government intervention with a $15 billion stabilization fund.

Analysts at JPMorgan indicated that the rapid escalation of US tariffs on China could disrupt the global economy enough to push it into recession.