The Pakistan Stock Exchange (PSX) tumbled over 1,000 points on Monday as the impact of the geopolitical tensions slammed markets around the world. The killing of top Iranian military commander Qassem Soleimani in Baghdad, by a US drone strike on Friday, has led to fears of war in the region, as major world leaders called for restraint to stabilise the highly volatile situation.
The PSX fell for most of the day, with analysts solely blaming the risks posed to Pakistan’s economy by the threat of an all-out US-Iran war. Major stock markets around the world have declined by over 3%. The KSE-100 index recorded a decrease of 1,027.06 points, or 2.43%, to settle at 41,296.24.
Tensions between Tehran and Washington have led to a global stocks sell-off and climbing oil prices fuelled by safe-haven buying in gold, according to analyst reports. A 2% increase in international oil futures has already been reported, and prices are expected to continue rising as long as tensions continue.
But one of the most substantial hits was in India, where the BSE Sensex closed 787 points or 1.9% lower on Monday, causing a loss of $42.8 billion to investors. Indian analysts placed the blame squarely on the Middle East crisis, noting that domestic events such as the violence at Jawaharlal Nehru University do not pose the kind of widespread economic threat that an Iran-US war does.
Japan saw the benchmark Nikkei 225 decline 1.91% to close at 23,204.86, while the Topix index fell 1.39% to 1,697.49. In South Korea, the Kospi index fell 0.98% to 2,155.07. Hong Kong’s Hang Seng index was down 1.11%.
Chinese mainland markets, however, went up: The Shanghai composite went up before flattening at 3,083.41, while the Shenzhen composite rose 0.44% to 1,768.68 and the Shenzhen component rose 0.39% to 10,698.27.
In Kuwait, stocks dropped more than 4%. Saudi Aramco went crashing as the Saudi Tadawul All Share Index lost 2.5%. Egypt’s EGX30 gauge fell 4.4%, and stocks in the United Arab Emirates, Qatar, Bahrain, Israel and Oman also weakened.
Let us end on a reminder. All this is just from the threat of war.
Sindh has been under locust attack for the past six months. Affected farmers have been crying for government’s help but even now the provincial agriculture minister says he is unable to estimate the extent of loss locusts caused to farmers. He only said surveys were being conducted to determine the scale of the loss, and some of the areas might be declared calamity hit. After the lapse of several months, Sindh Chief Minister Murad Ali Shah announced the government’s decision the other day to hire aircraft to kill locusts by spraying toxic fumes. He asked the agriculture minister to request the UAE to provide aircraft for the purpose. He said steps should be taken at the earliest, adding the provincial government would provide the necessary funds, equipment and insecticides.
However, concerned quarters have questioned the government’s planned move to spray poisonous fumes to kill locusts, especially at a time when starlings have begun to arrive in large numbers in the province. Starlings mainly feed on locusts. Experts have expressed fears that the spray of insecticides will have a hazardous impact on the environment and biodiversity. They suggest protecting locust-eating birds and use of nets to catch locusts. Government officials say relying on birds like starlings can only partly eliminate locusts. Sindh Agriculture Minister Ismail Rahu admits the hazardous effects of aerial spray but says there is no other option to fully eradicate locusts. He said all aspects would be kept in view and precautions would be taken to protect the environment and flora and fauna. He said the federal government had committed to providing assistance for the elimination of locusts, but it had developed cold feet.
Farmlands in at least 15 districts in the province have been afflicted by locusts. Swarms of locusts destroy crops over many acres within minutes. Recession is when a neighbour loses a job; depression is when you lose yours. This well explains the delayed governmental action on such a significant issue.