The benchmark KSE-100 index was back in the positive zone at market close on Friday after stocks recovered from intraday losses of nearly 1,700 points.
Minutes after the opening bell, shares fell as low as 34,266.91 (1689.78 points) as panic from the global coronavirus outbreak and trade disruptions was also witnessed at the PSX just like in financial markets all over the world on Friday.
But following a pause in trading, the KSE-100 gained nearly 1,800 points to close 0.29 per cent in the green at 36,060.88.
The rebound came on the back of recovery in European markets, US futures and international oil prices, according to Head of Foreign Institutional Sales at Next Capital Limited Muhammad Faizan.
Trading was halted at the stock exchange for the third time this week after the KSE-30 index fell 5.96 per cent to 15,039.17 points. KSE-100 was down 1,682.96 (4.68pc) to 34,273.73 points.
Speaking to Dawn.com, Deputy Head of Research at AKD Securities, Ali Asghar Poonawala, said the halt, which lasts 45 minutes, started at 9:25am.
Poonawala said a trading halt applies to the market when the large cap KSE-30 index falls beyond four per cent for a period of five minutes or more.
Explaining the reason behind the downward spiral, Poonawala said the market was witnessing a spillover of the same panic seen in the past few days because of demand compression from coronavirus.
But he went on to add that "some foreign selling is also suspected in pulling the market lower".
A Dawn report published today revealed foreign investors had pulled out almost one-sixth of their investments, usually referred to as hot money, in treasury bills (T-bills) during the last three weeks as they jump to safer bets to mitigate risks in the aftermath of coronavirus pandemic.
Net outflows from the T-bills reached $606.54 million in the first 12 days of the current month whereas total divestment from the country’s capital markets — equity, T-bills and Pakistan Investment Bonds (PIBs) — stood at $671.37m during the period, data released by the State Bank of Pakistan (SBP) Special Convertible Rupee Account (SCRA) showed on Thursday.
Next Capital Limited's Faizan while talking to Dawn.com reiterated that the sell-off at PSX was due to the global sentiment.
Global markets in turmoil
Asian equities went into meltdown on Friday, extending a global rout that saw markets experience their worst day in decades as fears of a worldwide recession caused by the coronavirus pandemic wiped trillions off valuations.
Shellshocked investors fled for the hills as governments across Europe and in the United States struggled to get a grip on the crisis that has swept the planet and shut communities down.
Central bank moves to support financial markets have also failed to staunch the bloodletting, while Donald Trump's decision to shut the US border to European travellers added to the panic.
"Markets remain in a freefall as uncertainty persists with no reliable anchor which can create near-term stability," said Ben Emons at Medley Global Advisors in New York.
Tokyo fell as much as 10pc at one point before edging back slightly, Seoul tanked 8pc and Mumbai fell more than 9pc. Hong Kong went into the break down 5.8pc, while Sydney, Singapore, Wellington, Jakarta and Manila were between four and five per cent off.
Bangkok dropped more than 7pc, with Taipei and Kuala Lumpur more than 6pc down.
Shanghai was the least affected by the meltdown, falling a little more than 3pc as the number of new cases in China, the centre of the outbreak, shrinks and people slowly return to work in the worst-hit areas.
The selling led to brief trading halts in Seoul, Mumbai, Bangkok and Jakarta.
The losses follow a virtual implosion on Wall Street and in Europe.
The Dow lost 10pc in its worst session since 1987, while London also had its worst day since that year.
Frankfurt had its blackest day since 1989, the year the Berlin Wall fell, while Paris suffered its biggest one-day loss on record.
On Thursday, shares at the Pakistan Stock Exchange also took a hammering with the benchmark KSE-100 index closing 1,707 points or 4.53 per cent down, mimicking the trajectory of global financial markets.