With over 1,300 points down, the KSE-100 index slumped at 33,187.
According to details, KSE shed more than 1,300 points just as trading began on Monday morning.
The market has lost around Rs. 300 billion capitalization, market sources said.
The slump has been a worldwide trend as major stock markets of the world suffered huge losses as bears overwhelmed the market amid sharply declining oil prices and recent slowdown of the economy of China.
AFP adds: Asian stocks sank deeper into crisis Monday, with Shanghai posting its largest intra-day fall since 2007 as growing concerns about China’s slowing economy rattled equity investors worldwide.
Oil prices fell further after slipping below $40 a barrel for the first time in six years, as weak Chinese manufacturing data deepened worries about the slowdown in the world’s number two economy.
China-linked shares led the falls, with Shanghai losing more than 8.50 percent at one point before recovering slightly to a 7.52 percent decline in afternoon trading — wiping out all this year’s gains. Hong Kong was down 4.77 percent.
Tokyo closed down 4.61 percent, or 895.15 points, at a six-month low of 18,540.68. Seoul dropped 2.47 percent or 46.26 points to 1,829.81 and Sydney lost 4.09 percent, or 213.3 points, to finish at a two-year low of 5,001.3.
Regional shares, as measured by the MSCI Asia Pacific Index, slumped to a two-year low Monday after suffering the worst week for three years. Taipei posted its worst ever intra-day slump of almost 7.50 percent.
“Today has all the hallmarks of being one of the worst trading days of the past five years,” said Evan Lucas at IG Markets.
“The reaction from Asia today will be symptomatic of the current investor sentiment and belief that a hard landing (of China’s economy) is inevitable.”
Asia’s losses followed a steep fall in US and European stocks on Friday, while the price of several commodities plunged to multi-year lows and emerging market currencies took a battering.
Global equities have lost more than $5 trillion in value since China’s shock currency devaluation on August 11 sparked fears its economy is slowing more than thought.
Data on Friday showing Chinese manufacturing activity slowed to a 77-month low added to the gloom, signalling that even a campaign by Beijing to stimulate growth by cutting interest rates and boosting lending is not working.
Pension fund buying equities
More than 750 stocks listed in Shanghai fell by their maximum 10 percent daily limit on Monday, among them many of the brokerages which helped to spark a year-long rally that saw shares soar 150 percent before they collapsed in June.
Chinese authorities have since launched unprecedented measures to support shares. On Sunday state media said the huge national pension fund would now be allowed to buy equities, in a fresh bid to prop up the market.
The fund, which had some 3.5 trillion yuan ($550 billion) in net assets at the end of 2014, will be able to invest up to 30 percent of that in equities.
But local investors fear even Beijing’s huge firepower will not be enough to stop the rout in Chinese shares, particularly after Shanghai shares fell through the key 3,500 point mark.
“This is a real disaster and it seems nothing can stop it,” Chen Gang, Shanghai-based chief investment officer at Heqitongyi Asset Management Co., told Bloomberg News.
“If we don’t cut holdings ourselves, the fund (managed by his firm) faces risk of forced closure. Many newly started private funds suffered that recently. I hope we can survive.”
Oil prices also fell, after breaking below the $40 barrel for the first time in six years Friday on concerns about waning demand in China, the world’s top energy importer.
Data showing the number of US drilling rigs rose last week, despite the slump in prices, added to concerns a global supply glut will last for years.
US benchmark West Texas Intermediate for October delivery fell $1.28 to $39.58 while Brent crude for October eased $1.45 to $44.65.
Jitters over China and the global economy saw traders drop the dollar and move into the yen — a safe haven in times of turmoil and uncertainty — while the currencies of Malaysia, Thailand and South Korea all hit fresh multi-year lows.
The greenback fell to 121.23 yen in Asia Monday, down from 122.06 yen in New York Friday. The euro was at $1.1425 and 138.51 yen, from $1.1386 and 138.97 yen.
Gold traded at $1,153.24 compared to $1,154.45 late Friday.
In other markets:
— Taipei closed down 4.84 percent, or 376.58 points, at 7,410.34 after posting their biggest ever intra-day decline of 7.49 percent.
Taiwan Semiconductor Manufacturing Co lost 4.96 percent to Tw$115.0 while Hon Hai Precision closed 4.56 percent lower at Tw$81.6.
— Wellington dropped 2.50 percent or 143.87 points to an eight-month low of 5,607.32.
Heavyweight Fletcher Building was among the biggest losers, down 3.98 percent at NZ$7.23, while Air New Zealand slipped 0.93 percent to NZ$2.67.