The Pakistan Stock Exchange (PSX) experienced a significant drop on Wednesday, with the benchmark KSE index losing 3,545.6 points or 3.09% to close at 111,326. The plunge was triggered by a late-night statement from the information minister claiming that India is planning an attack on Pakistan within the next 24 to 36 hours. The minister’s statement, which cited intelligence-based information, scared investors and led to mass offloading of holdings.
This wiped out Rs427 billion from the market capitalisation in one of the largest single-day losses in terms of points.
Tensions impact Pakistan stock exchange
Tensions between the nuclear-armed neighbours have been escalating since India unilaterally revoked the Indus Water Treaty, putting constant pressure on the stock market.
Notable losers included heavyweight stocks like Lucky Cement, Engro Holdings, United Bank, Pakistan Petroleum Ltd, and Fauji Fertiliser Company, which collectively pulled the index down by 1,132 points. Ali Najib of Insight Securities Ltd stated, “Warmongering vibes consistently undermine investor confidence, making them anxious and reducing their positions in uncertain circumstances.”
Despite the negative sentiment, market activity was robust, with the trading volume rising by 19.76% to 490.94 million shares and the traded value increasing by 7.07% to Rs31.12 billion day-on-day. In contrast, the Indian stock market remained steady, with the benchmark BSE Sensex at 80,242.24 and the broader NSE Nifty 50 largely unchanged at 24,334.3. Gains in HDFC Bank and Reliance offset the pressure from escalating geopolitical tensions.
The Indian rupee also rose 0.91% against the US dollar to 84.4875, supported by inflows into equities and increased dollar sales by exporters.