The Pakistan Stock Exchange crash deepened on Thursday as geopolitical fears erased early gains and sparked widespread panic selling. Rising hostilities between Pakistan and India rattled investor confidence, dragging the KSE-100 Index down by nearly 6%.
From Rally to Collapse
The day began with optimism as the KSE-100 surged 1.7% to a high of 111,881.02 points. However, that momentum quickly reversed. Fears of escalating conflict triggered intense sell-offs, sending the index plunging to a low of 101,598.90 points before it settled at 103,526.81—down 6,482.21 points or 5.89%.
The KSE-30 Index also dropped more than 5%, prompting a market-wide trading halt at 12:34 pm. PSX confirmed that equity markets were paused under circuit-breaker rules after breaching the 5% threshold. All outstanding orders were canceled, with trading resuming later in the afternoon.
Read: Indian Rupee Falls Sharply Amid Rising India-Pakistan Tensions
Geopolitical Uncertainty Shakes Confidence
Tensions soared following India’s military strikes on multiple Pakistani cities, which Islamabad labeled “unjustified aggression.” Pakistan claimed at least 31 civilians were killed and responded by downing five Indian jets and several drones.
AAH Soomro, an independent investment analyst, noted, “Nervousness will persist until both sides halt their tit-for-tat responses.” He added that the situation remains fluid, but diplomatic channels have opened, including talks between the National Security Advisers of both nations.
Hopes for Stability Rest on IMF Decision
Despite the turmoil, investors are watching the upcoming IMF Executive Board meeting on May 9. Pakistan is expecting a $1.3 billion disbursement under the Extended Fund Facility (EFF), along with potential access to the Resilience and Sustainability Facility (RSF). If approved, the total aid could reach $2 billion.
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