Investors at the Pakistan Stock Exchange (PSX) faced some deep losses on Wednesday. The benchmark KSE-100 index tumbled by a massive 6,500 points in today’s trading session, wiping out nearly 6% of its value in a matter of hours.
This whopping decline dragged the Pakistan stock exchange main index KSE 100 down to 107,007, triggering panic selling across trading floors and financial circles.
Even at the time of writing this, the PSX showed no signs of recovery, with losses still hovering over 4%.
Why the crash? All eyes on Operation Sindoor
The trigger behind the bloodbath in the KSE 100 (Karachi Stock Exchange) comes after India’s strike. Tensions flared dramatically overnight as India launched a precision military operation named “Operation Sindoor”, targeting terror infrastructure inside Pakistan and Pakistan-occupied Kashmir (PoK).
Nine locations were hit in the early hours of Wednesday which include four within Pakistan and five in PoK, marking a major escalation following the recent terror attack in Pahalgam, Kashmir.
The operation launched by the Indian in the early hours today targeted alleged hideouts of Jaish-e-Mohammed (JeM), Lashkar-e-Taiba (LeT), and Hizbul Mujahideen (HM), all said to be operating from within Pakistan’s territory.
How the markets reacted to the escalating tension
With fighter jets making headlines and ceasefire violations being reported along the Line of Control (LoC), it did not take long for Pakistan’s financial markets to react.
How has Pakistan reacted
Shortly after India’s strike, Pakistan reportedly responded with heavy artillery fire across the LoC. It targeted areas in Jammu and Kashmir. Meanwhile, the Indian Army stated that it is responding in a “calibrated manner”.
It is also important to note that these developments also coincide with a nationwide civil defence drill planned across 244 Indian districts, adding to the war-like mood gripping the region.