After a week of dramatic falls, the Karachi Stock Exchange showed some signs of recovery in today’s trading session. The KSE 100 index, which had been battered by deepening tensions between India and Pakistan, opened with a positive swing, gaining over 800 points in early trade. Though it had surged nearly 3% during the day, the index later shrunk around 1% higher which is a modest comeback after a chaotic four-day rout.
Panic selling, then pause
The rollercoaster ride began earlier this week when the markets in Pakistan were hit hard by fears of a full-blown conflict. On Thursday, things took a grim turn. The KSE 100 plunged so sharply that it lost over 6% in a single session that the trading was halted.
It was one of the worst meltdowns in the stock exchange’s recent history, wiping out investor wealth worth over Rs 820 billion. Panic gripped the market after reports of Indian drone strikes on multiple cities, including Karachi and Lahore.
Karachi Stock Exchange: Rs 1.3 trillion blow
In just a matter of days, the Pakistan Stock Exchange saw a wipeout of over Rs 1.3 trillion in market value, as per reports. The benchmark index had crashed nearly 10% from its highs, triggering widespread concern about the country’s financial stability.
Tensions take centre stage
This market meltdown is a surge in military tensions. India had launched airstrikes on May 7 targeting terror camps across the border in response to a deadly terror attack in Jammu & Kashmir Pahalgam, where 26 civilians lost their lives. The operation was named ‘Operation Sindoor.’
In the days that followed, both the countries India and Pakistan ramped up security, with reports of attempted retaliatory strikes by Pakistan. Furthermore, several cities in northern India, including Amritsar and Chandigarh, saw blackouts.