The Pakistan Stock Exchange (PSX) on Wednesday witnessed yet another bloodbath this year — tumbling by as many as 6,500 points in intraday trade — as investors’ fears of a military action by India against Pakistan came true last night.
The Pakistani military brought down five Indian jets in retaliation for late-night strikes launched by its neighbouring country at six sites in Punjab and Azad Jammu and Kashmir.
The benchmark KSE-100 index decreased by 6,560.82 points, or 5.78 per cent, to stand at 107,007.68 from the last close of 113,568.50 when the market opened at 9:30am.
Due to the massive dip, the market was immediately suspended briefly.
This marked the second-largest intra-day plunge (points-wise), ranking next to the nearly 8,700-point loss that followed the United States’ tariff announcement last month.
However, the market started recovering slightly, reaching 112,457.37 points at around 10:34am, before declining to 111,171.92 points at 12pm — nearly 2,400 points below yesterday’s close.
“The market opened under pressure today following Indian strikes on unarmed civilians in Pakistan,” said Yousuf M. Farooq, research director at Chase Securities.
“Some selling has been observed, though volumes remain low as investors assess the evolving situation,” Farooq said, adding that recovery was expected once tensions begin to de-escalate.
Shahbaz Ashraf, chief investment officer at Frim Ventures, also attributed the sell-off to “heightened geopolitical tensions following reports of Indian strikes on multiple Pakistani locations”.
“The flare-up has rattled investor sentiment, with fears of further escalation weighing on the market,” he said. However, Shahbaz added, analysts remained “cautiously optimistic, hoping the conflict will remain short-lived with likely mediation from global powers”.
“Importantly, with macroeconomic indicators showing signs of recovery, market watchers believe this correction could be temporary. Many view the pullback as a potential buying opportunity, especially for long-term investors looking to accumulate quality stocks at lower valuations,” he noted, explaining the gains witnessed later.
Samiullah Tariq, head of research at Pak Kuwait Investment Company Ltd, said the impact of today’s selling pressure would be short-term and the market would “recover once this ends”.
Awais Ashraf, research director at AKD Securities, also observed that the PSX was “feeling the impact” of last night’s developments.
Echoing Shahbaz’s opinion, Awais said the plunge “may present a buying opportunity, as we do not expect the situation to escalate further”.
In the past few days, panicky investors have continued to reduce their holdings as Pakistan had expressed a heightened possibility of a military action by India in the wake of the latter’s allegations regarding a deadly attack in occupied Kashmir.
The April 22 attack in Pahalgam killed 26 people, mostly tourists, in one of the deadliest assaults since 2000. India, without investigation or evidence, implied “cross-border linkages” of the attackers. Pakistan has firmly rejected the claim and called for a neutral probe.
International rating agency Moody’s has warned that sustained India-Pakistan tensions could negatively affect Pakistan’s growth.
