A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant

loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles.

Stock market crashes are social phenomena where external economic events combine with crowd behavior and psychology in a positive feedback loop where selling by some market participants drives more market participants to sell. Generally speaking, crashes usually occur under the following conditions:[1] a prolonged period of rising stock prices and excessive economic optimism, a market where P/E ratios exceed long-term averages, and extensive use of margin debt and leverage by market participants.

There is no numerically specific definition of a stock market crash but the term commonly applies to steep double-digit percentage losses in a stock market index over a period of several days. Crashes are often distinguished from bear markets by panic selling and abrupt, dramatic price declines. Bear markets are periods of declining stock market prices that are measured in months or years. While crashes are often associated with bear markets, they do not necessarily go hand in hand. The crash of 1987, for example, did not lead to a bear market. Likewise, the Japanese Nikkei bear market of the 1990s occurred over several years without any notable crashes. The economy had been growing fluidly for most of the Roaring Twenties. It was a technological golden age as innovations such as radio, automobiles, aviation, telephone and the power grid were deployed and adopted. Companies that had pioneered these advances, like Radio Corporation of America (RCA) and General Motors, saw their stocks soar. Financial corporations also did well as Wall Street bankers floated mutual fund companies (then known as investment trusts) like the Goldman Sachs Trading Corporation. Investors were infatuated with the returns available in the stock market especially with the use of leverage through margin debt.

On August 24, 1921, the Dow Jones Industrial Average stood at a value of 63.9. By September 3, 1929, it had risen more than sixfold, touching 381.2. It would not regain this level for another 25 years. By the summer of 1929, it was clear that the economy was contracting and the stock market went through a series of unsettling price declines. These declines fed investor anxiety and events soon came to a head on October 24 (known as Black Thursday), October 28 (known as Black Monday), and October 29 (known as Black Tuesday).

On Black Monday, the Dow Jones Industrial Average fell 38 points to 260, a drop of 12.8%. The deluge of selling overwhelmed the ticker tape system that normally gave investors the current prices of their shares. Telephone lines and telegraphs were clogged and were unable to cope. This information vacuum

only led to more fear and panic. The technology of the New Era, much celebrated by investors previously, now served to deepen their suffering.

The following day, Black Tuesday was a day of chaos. Forced to liquidate their stocks because of margin calls, overextended investors flooded the exchange with sell orders. The Dow fell 30 points to close at 230 on that day. The glamour stocks of the age saw their values plummet. Across the two days, the Dow Jones Industrial Average fell 23%.

By the end of the weekend of November 11, the index stood at 228, a cumulative drop of 40 percent from the September high. The markets rallied in succeeding months but it would be a false recovery that led unsuspecting investors into further losses. The Dow Jones Industrial Average would lose 89% of its value before finally bottoming out in July 1932. The crash was followed by the Great Depression, the worst economic crisis of modern times that plagued the stock market and Wall Street throughout the 1930s. KARACHI: Due to the shock-wave by the supreme court and Tahreek-e-Minhajul Quran in Islamabad, the country took a major battering. The KSE-100 Index crashed by more than 500 points and major players expect more voluntarily in the day to come.

Arif Habib, Former President of KSE and Head of Arif Habib Corp. said, The market had been jittery because of the sit-in in Islamabad but the SCs order made further breaches and those traders who wanted to book losses sold their shares. He added, The market will exhibit signs of nervousness till the political situation improves. If national institutions follow the rule of law, the market will [resurface] because traders dislike extra-constitutional measures. The fall is the 2nd Largest in Pakistans history. the 1st was in May 2008, which show the fall of 500 in a single session. The current situation also presents serious buyers with the option of finding good bargains. He said, The quarterly results of several companies are good and these will support the market despite political turmoil. On Tuesday, the KSE-100 index fell by 525.29 points, or 3.16%, to 16,107.89 points against Mondays close of 16,633.18 points as panicky investors offloaded their holdings. The index continued on a downwards trajectory during both sessions, registering its lowest ebb at 16,049.06 points. Meanwhile, the KSE-30 index shed 385.59 points, or 2.84%, to close at 13,196.76 points. The huge selling spree triggered surges in both turnover and value during the day. Turnover rose by 152 million shares to 239.42 million shares from 87.94 million shares whereas value rose to Rs5.28 billion against Rs1.68 billion recorded in the previous session. COO Escort Capital, Hasnain Asghar Ali said, The value of several stocks declined by some five percent and hit locks at the lower levels; however, strong fundamentals of many stocks prevented an across-the-board lock from kicking in. According to Furqan Punjani, Head research at BMA capital, Investor likely to return bourses, drawn by the full-year results (and attractive

dividends and bonus issues) for primarily commercial banks and fertilizers as well as the attractive halfyearly results for cements, textiles and IPPs. Of the active issues, the highest increase was recorded in the shares of Gillette Pak, which increased by Rs5.92 to Rs124.41 per share, followed by Al-Noor Sugar, which rose by Rs1.84 to Rs38.74 per share. The biggest loser was Nestle Pakistan Ltd, which saw its share price fall by Rs225.00 to Rs4,550 per share, followed by Rafhan Maize Prod, which saw its price eroded by Rs199.92 to Rs3,798.46 per share. The leaders in terms of turnover were Fauji Cement, Byco Petroleum, TRG Pakistan Ltd, Jahangir Siddiqui Co and Maple Leaf Cement. However, the value of all these stocks declined. Fauji Cement was the volume leader with 43 million shares; followed by Byco Petroleum with 20.12 million shares traded. Shares turnover in the futures market increased from 3.89 million shares traded in the previous session to 14.21 million shares. Of a total of 365 companies stocks traded, 15 advanced, 336 declined and 14 remained unchanged. The ISE-10 index downtrend began on Monday as Tehreek-e-Minhajul Quran workers started converging on the dharna site, which is a few meters from the ISE. The exchange shed a total of 11.06 points on Monday. Tuesday, the index went into free fall after the SC order and lost another 86.93 points to close at 3140.28 points. The power shortage, the bad law and order situation and the huge circular debt had kept the stock market under pressure but the current decision of the apex court and the long march pressuring the government to go home have driven the market into the red zone, said ISE Managing Director Mian Ayyaz Afzal. A Top official of the SECP said: Political uncertainty is the cause of the market crash and the market will remain volatile in coming days too.

While the bazaars and the manufacturing sector hummed away unconcerned, the bourse felt the shivers of political uncertainty and the LSE-25 index shed a total of 159.71 points to close at 3,770.10 points. Political uncertainty is poison for the capital markets and its reaction over the last two days reflects the pressure felt by investors, said former chairman Lahore Stock Exchange Group Captain (retd.) Naeem A. Khan. The market was already overheated and the recent turmoil on the political front provided the big players with an excuse to liquidate their assets. If the situation does not improve, we soon might see an even greater decline in the capital market index. http://www.marketwatch.pk/news/forex-news/stock-market-crashed Islamabad Stock Exchange gains 56 points Wednesday, January 23, 2013 Regnum Fs

Wednesday, January 23, 2013 - IslamabadIslamabad Stock Exchange (ISE-10) here on Tuesday witnessed bullish trend as the index was up by 56.29 points to close at 3268.49 as compared to the previous days trading.

Speaking to media, Stock Analyst of First Equity Pvt Ltd, M.M Hassan said that buying by the investors due to result season led the positive rally in the local stock market.

There are some scrips at oversold positions and the punters have taken them with expectation of more return in the future, he added. Hassan said that the banking and cement sector remained the most traded in the local bourse resulting the rise in the turnover of the market.

A total shares traded was 310,000, which was up by 284,500 when compared it to a day earliers closing. Out of 124 companies shares traded, the price of 117 was increased while the price of 25 decreased.

The price top gainer Mitchell Fruit Farma was increased by Rs.15.50 while the price top loser Premier Sugar decreased by Rs.3.95. Maple Leaf Cement, Byco Petroleum and National Bank of Pakistan remained volume leaders, with volume of 200,000, 45,000 and 24,000 shares respectively . http://www.regnumfinancials.com/2013/01/islamabad-stock-exchange-gains-56-points.html