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, Pakistan based media Dawn News reported.
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.
In the past few days, 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 report by Dawn said.
The April 22 attack in Pahalgam killed 26 people, mostly tourists, in one of the deadliest assaults since 2000.
International rating agency Moody’s has warned that sustained India-Pakistan tensions could negatively affect Pakistan’s growth.
It also said that escalating tensions could cause a setback to nascent macroeconomic stability and also disrupt Pakistan’s access to foreign funding flows.
On the other hand, Moody’s noted that macroeconomic conditions in India would remain stable. However, it did stress that higher defence spending could impact India’s “fiscal strength and slow its fiscal consolidation”.
