The Pakistan Stock Exchange has entered bearish market amidst back to back market crash, and has plunged about 20% in just first eighteen days of March 2020, as coronavirus has rattled investors’ confidence and spooked market sentiments. Pakistan’s benchmark KSE-100 followed global panic sell-off, and is still on a free-fall plunge. The global sell-off however, kicked in globally coordinated stimulus measures and injections of liquidity worth trillions of dollars to save stock markets from crashing and saving further loss of market capitalization. On the contrary, Pakistan’s government has failed to take a single measure or inject direct stimulus to support crashing stock market. In a recent monetary policy measure, the only stimulus measure taken in Pakistan, is byState Bank of Pakistan’s Monetary Policy Committee (MPC) which slashed its policy interest rate by 75bps to 12.50%. To that end, for the first time, the State Bank also announced a Refinance Facility for combating COVID-19, RFC which is Rs5 billion scheme, provided to banks at zero per cent, who can then lend to hospitals at 3 per cent for five years for equipment. The SBP also announced a “Temporary Economic Refinance Facility (TERF)” to stimulate new investment in manufacturing. Under this scheme, the SBP will refinance banks to provide financing at a maximum end-user rate of 7 per cent for 10 years for setting up of new industrial units. The total size of the scheme is Rs 100 billion, with a maximum loan size per project of Rs 5 billion. The state Bank’s recalcitrant approach towards market sentiment has failed to mitigate investor fears and bearish sentiment, since the modest cut in interest rate paints a grim capacity of monetary policy tool to support the stock market. In fact the interest rate cut decision has concomitantly ricocheted into further panic as State bank also failed to exhibit its readiness to accept the desperate nature of stock market crisis and its redundancy to take extraordinary measures. Meanwhile, an absolute silence on part of the government to announce fiscal stimulus package is unsettling. Government’s austerity is killing stock market, as even the tentacles of global pandemic which has been chopping off Pakistan stock exchange of its index value, has not forced the government to step forward to establish market support fund or similar measures such as tax deferrals, or soft loans. The government’s policy of increasing taxes and squeezing spending in its austerity bid will prove to be calamitous not just for the stock market but also for the economy, as an already contracting business activity and crippling infrastructural support will send the economy into recession. The government was expected to act swiftly and establish emergency market support fund in a similar way it approved Rs20 billion fund last year in May in relaxation of prudential regulations aimed at giving an artificial ‘boost’ to the market and end volatility at the Pakistan Stock Exchange (PSX). Government’s Economic Coordination Committee approved the proposal of the Finance Division authorising the government of Pakistan to issue sovereign guarantee amounting to Rs20 billion for investment in National Investment Trust (NIT)-State Enterprise Fund. The government’s ironic absence in the face of crisis and state bank’s non-conforming attitude is in sharp contrast to what the foreign governments and monetary intuitions have done. The U.S Federal reserve has cut interest rates to almost zero and launched a $700billion stimulus programme in a bid to protect the economy from the effect of coronavirus. U.S central bank already cut interest rates by half a percentage point after an emergency meeting on earlier in March. That had been the first rate cut outside of a regularly scheduled policy meeting since the financial crisis in 2008.Stock markets have plunged in recent days amid fears that economic paralysis will wipe out corporate profits and spark a global recession. Following U.S stock markets crash and wall street witnessing over $18 trillion lost in two weeks , while recording its back to back worst single day decline since 1987’s Black Monday Crash, the Federal Reserve announced further measures to prop up liquidity including a potential injection of more than $1.5 trillion into the market. In a bid to support its airlines, businesses and stock market the U.S government also unveiled over $1 trillion dollars stimulus package above $300 Billion worth of tax deferrals. These measures have been taken in just the first two weeks of March alone. In the neighbouring India, although Reserve bank of India has not yet introduced monetary policy led stimulus measures, which is already just over 5%, but has announced a slew of measures including Rs1 trillion long-term repo operations (LTRO) and another six-month US dollar sell/buy swap auction to provide liquidity to the foreign exchange market. Global financial institutions, central monetary authorities and governments have scrambled to inject stimulus measures which has shot up to about seven trillion dollars combined. Following the trend the state bank of Pakistan and government need to inject drastic stimulus measures to contain the economic fallout of corona virus led panic, or else the slow response and absence of any initiative by the economic managers of the country will drift the economy into recession.