KARACHI: The initial shock and disbelief at the victory of US presidential candidate Donald Trump sent shares reeling across the global stock markets. Investors at the Pakistan Stock Market (PSX) also ran for cover in what analysts later thought was a “knee-jerk” reaction.

The benchmark KSE-100 index also went into a free fall. But the incoming US president’s victory speech, which was devoid of sound and fury, offered comfort to the PSX currently swarmed by liquidity and buyers with healthy appetite.

Right from the beginning, brokers and analysts tried to calm the market. Most compared the rise and fall of shares at the PSX to Brexit — when Britons voted to leave the European Union — that led equities to plunge by 1,408 points but then the recovery was almost as quick.

But for all that, market watchers continued to gauge the impact of Mr Trump’s victory on the domestic economy and brokers were seen putting their faith in little “paradigm shift” in US policies.

Analysts at Arif Habib Ltd believed that it was too early to comment on the consequences of US election results, but mused that it should be neutral for all other key sectors except textile which may have some negative impact given its sales exposure to the western ally.

The United States is one of the major consumers of Pakistani exports, with annual average purchases amounting to $3.8bn (or 16pc of Pakistan’s overall exports) in the last four fiscal years. In contrast, imports amounted to $1.1bn (or 2.8pc of overall imports) during the same period. Pakistani workers in the United States are also key contributors to workers’ remittances with an annual average $2.4bn, or 15pc of all remittances, in the preceding fiscal year. Whether these two vital sectors would be touched has yet to be seen.

Analysts at Alfalah Securities also worried over the negative repercussions on the textile sector. Pakistan’s total exports to the United States in 2015-16 stood at $3.5bn, of which 83pc were of textiles, they said.

Topline Securities took a step forward in an effort to make lemonade out of lemons. “Pakistan’s economy has generally shown higher economic growth during the Republican era than that of the Democratic rule,” the brokerage affirmed.

It said that in the course of last decade, the US influence on Pakistan economy was decreasing, represented by trade flows between the two countries. Imports from the United States that were 25pc of total Pakistan’s imports 10 years ago have since dwindled to 15pc, while exports have declined over the same period to 3.6pc from 4.5pc of the Pakistan’s total exports.

Published in Dawn November 10th, 2016