The instability witnessed in stock markets across the globe has not spared Pakistan. On Monday, the benchmark index saw all previous records of single-day drops in value broken, as the Pakistan Stock Exchange (PSX) lost over 2300 points, and came down to a four-month low.

The reason for this is obvious; no matter how much the government tries to allay the fears of the general public, the rise in cases of the coronavirus is leading to fear among investors of what comes next. Uncertainty regarding the virus, the shutdown of many trading routes and businesses and industries all over the world is causing panic, and unfortunately, Pakistan is no different.

Given that the international community is facing a pandemic, the jittery nerves of investors, stock brokers and the stock market as a whole are to blame for this sudden loss in value. Stock exchanges must play a more proactive role when they see points dropping with such frequency. The companies listed on the exchange must also appeal to their shareholders and investors of keeping their money in the exchange even when they are fearful to do so.

The instability of stock markets can turn quickly from a period of economic prosperity to one that is taking a turn towards recession. The government can step in here and make sure that this does not happen. Other states across the world have altered their policies and released stimulus packages to counter the effects of mass sell-offs. While the latter may be difficult for with our limited resources, holding meetings with investors and offering incentives to investors for keeping their stocks parked in the exchange will do wonders in this time of distress. We must act quickly and efficiently, before this situation spirals out of control.