The Pakistan Stock Exchange (PSX) experienced a significant downturn, with the benchmark KSE-100 index plummeting over 3,500 points, reflecting investor concerns over potential military actions by India.
Market Performance Overview
The KSE-100 index opened at 114,872.18 points and declined steadily throughout the day, closing at 111,326.57 points—a drop of 3.09%. This sharp decline was attributed to heightened geopolitical tensions following claims by Pakistan’s Information Minister, Attaullah Tarar, that India might launch a military strike within 24 to 36 hours, citing “credible intelligence” regarding Pakistan’s alleged involvement in a recent attack in Pahalgam, Kashmir.
Investor Sentiment and Market Response
Analysts noted that the market’s reaction was driven by increased risk aversion among investors. Awais Ashraf from AKD Securities highlighted that the concerns over potential military conflict led to widespread selling. Similarly, Yousuf M. Farooq from Chase Securities pointed out that the market was under pressure following the information minister’s statement suggesting that India may take military action within the next 24–36 hours.
Sectoral Impact
The broad-based sell-off affected various sectors, with significant declines observed in commercial banks, oil and gas exploration, power generation, and refineries. Heavyweight stocks such as HUBCO, MARI, OGDC, PPL, PSO, SHEL, HBL, MCB, and NBP closed in the red, further weighing on the market.
Currency and Bond Market Reactions
In the currency market, the Pakistani rupee remained relatively stable against the US dollar, appreciating slightly to close at 278.47 in the inter-bank market. However, Pakistan’s international bonds experienced a decline, with the 2036 bond falling 1.3 cents to 71.85 cents on the dollar, indicating investor concerns over the escalating tensions.
Outlook
Market participants are closely monitoring developments in the region, as the situation remains fluid. Analysts suggest that the PSX’s performance in the coming days will largely depend on the geopolitical landscape and any de-escalation of tensions between India and Pakistan.
