The Pakistan Stock Exchange (PSX) experienced a catastrophic collapse, losing over 6,500 points on a single day, as tensions between nations ran high after India’s military operation against the Pahalgam terror attack.
Investor panic and regional uncertainty result in one of the biggest market crashes in the history of Pakistan’s finance.
Stock Market Reels as Operation Sindoor Ignites Uncertainty
With India initiating Operation Sindoor, an aimed military onslaught against terrorist structures in Pakistan and Pakistan-occupied Kashmir, financial markets throughout the region felt the impact. The KSE-100 benchmark index fell by 6,560.82 points, a drop of 5.78% that sent the index to 107,007.68, from 113,568.50 at morning’s opening bell.
Investor Panic Grips the PSX
The morning started with unmistakable tension with the market opening under instant pressure. Fatima Bucha at AKD Securities pointed out that although the market had a small recovery after 11 am when it reached the level of 112,457.37 points, the turn was not momentary. Within 12 pm, the index fell again to 111,171.92 points, showcasing continued discomfort of investors.
“Everybody anticipated this,” Bucha said, citing rumour regarding a potential Indian military attack following the April 22 Pahalgam terror strike. Investors had been sitting nervously awaiting such news, and the beginning of Operation Sindoor justified their fears, initiating a sell-off spree.
Operation Sindoor and Its Geopolitical Fallout
The escalation was in rebuttal of the fatal Pahalgam attack, where 26 civilians died in an attack attributed to The Resistance Front, a Pakistani-based terror outfit. India retaliated with Operation Sindoor, which sought to destroy major militant positions along the frontier.
The daring military operation seriously ratcheted up tensions between the two nuclear-armed rivals, sending a heart-stopping message to financial markets already on edge due to recent global uncertainty.
Comparisons to Global Market Crashes
The crash in the PSX now sits at the second-largest intraday point loss for Pakistan, preceded only by last month’s 8,700-point crash in the U.S. after President Donald Trump’s announcements on trade tariffs. This comparison highlights how dire the ongoing crisis is, and how susceptible it is to impacting larger regional market stability.
Shahbaz Ashraf, Chief Investment Officer at Frim Ventures, offered a glimmer of cautious optimism, suggesting that global diplomatic intervention may prevent a prolonged conflict. “Investors are hopeful this will be short-lived,” he said, noting that much will depend on international mediation efforts in the coming days.
Looking Ahead: Fragile Recovery or Prolonged Instability?
Though some players in the market are hoping for a quick resolution, the situation is still risky. Volumes were significantly low, indicating a general wait-and-watch attitude. Since geopolitical uncertainties continue to stay in focus, the Pakistan Stock Market can keep experiencing turbulence in the coming days.
Investors and analysts alike will be watching political events closely, waiting for signs of de-escalation or further retaliation, either of which could set the short-term direction of South Asia’s financial markets.
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