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KSE-100 index hits sharp decline

Economy & Markets

Will PSX Crash? PSX Volatility, Investor Psychology & Pakistan’s Optimal Economic Response

PSX volatility amid Iran tensions is not a structural crisis. Here’s how disciplined investors and policymakers should respond.

Policy Response Pakistan Should Take

  1. Communicate macro stability clearly.

  2. Avoid reactionary monetary tightening unless oil shock sustains.

  3. Ensure institutional buyers (pension funds, state insurers) provide liquidity floors.

  4. Prevent leverage excess via regulatory oversight.

Sentiment can collapse faster than fundamentals. Leadership matters.


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