As tension between India and Pakistan continues over the deadly April 22 terror attack in Jammu and Kashmir’s Pahalgam region, the Pakistani stocks markets are also feeling the heat. Pakistan’s benchmark KSE-100 index has fallen nearly 8000 points or 6.09% between April 22 and April 30. However today, i.e May 2, the markets have recouped some ground after the sharp crash.
April 30: A day of bloodbath for PSX
April ended on a particularly grim note for the PSX. On Wednesday, April 30, the KSE-100 index fell 3.09% in a single day, shedding 3,545 points and closing at 111,326.57.
Heavyweight companies like LUCK, ENGROH, UBL, PPL, and FFC were among the top losers, together dragging the index down by over 1,132 points.
May 2: A short-lived rebound?
After days of relentless selling, May 2 brought a glimmer of green. The KSE-100 index gained 2,179.80 points, or 1.96%, to close at 113,506.38. But market watchers warn this could be a dead-cat bounce unless tensions cool between the neighbours.
Pahalgam attack: The flashpoint
The steep market decline coincided with the April 22 terror attack in Pahalgam, where 26 tourists, including one Nepali national, lost their lives. In retaliation, New Delhi swiftly took a series of hard-line steps:
It has suspended the Indus Waters Treaty, affecting water-sharing between the countries and shut the Attari-Wagah border, halting bilateral overland trade.
Furthermore, it expelled Pakistani military attaches from the Indian High Commission. In addition it revoked visas and suspended visa issuance for Pakistani citizens.
Pakistan also responds with certain measure
Pakistan as well responded which includes suspending the 1972 Shimla Agreement. It closed its airspace to Indian aircraft. Furthermore, it increased military presence along the Line of Control, triggering cross-border skirmishes.