ISLAMABAD: The stock market on Monday has been reversing losses and regained 1,000.78 points or 2.63 percent as global investors placed their hopes on a coordinated global monetary policy response to weather the damaging economic impact of the coronavirus epidemic.
The benchmark KSE-100 Share Index level reached 38,984.40 points as of 01.14pm.
The change came following decline in certain inflation rates, petroleum product prices, improvements in international stock markets and positive effects of the Afghan peace deal.
Adopting a negative trajectory for the latest session, the apex of the day remained 39,024.60 and 37,983.62, the lowest so far. The market opened at 38,077.30 today, and closed at 37,983.62 on Friday.
Pandemic fears pushed markets off a precipice last week, wiping more than $5 trillion from global share value as stocks cratered to their steepest slump in more than a decade.
The sheer scale of losses prompted financial markets to price in policy responses from the U.S. Federal Reserve to the Bank of Japan and the Reserve Bank of Australia.
Futures now imply a full 50 basis point cut by the Fed in March while Australian markets are pricing in a quarter-point cut at the RBA’s Tuesday meeting.
Also helping calm market nerves, Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank would take necessary steps to stabilise financial markets.
In equities, Chinese shares opened higher with the blue-chip index up 1.5%.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.4%, turning around from a loss of about 0.3% earlier in the day.
E-minis for the S&P500 ESc1, which were down more than 1% at one point, were last up 0.3% while Japan’s Nikkei, which opened 1.3% lower at a six month trough, climbed 0.4%.
Australia’s S&P ASX/200 , which had tumbled 3%, was last off 1.8%.
Benchmark U.S. 10-Year Treasuries hit a fresh record low of 1.0750% US10YT=RR.
Despite some stability in the market, analysts still expect volatility to persist.
“Any signs that new cases are beginning to taper could be seen as a positive catalyst for the market especially given that some of the market complacency has reduced with equity valuations much lower vs few weeks ago,” Nomura analysts wrote in a note.
“In the very near term until 1Q reporting results, we expect Asian equities may remain quite volatile,” they added.
“However, on a medium term basis we believe the risk-reward is now getting favourable, assuming the virus does not take the form of a virulent global pandemic.”
Leaders in Europe, the Middle East and the Americas rolled out bans on big gatherings and stricter travel restrictions over the weekend as cases of the new coronavirus spread.
The epidemic, which began in China, has killed almost 3,000 people worldwide as authorities race to contain infections in Iran, Italy, South Korea and the United States.