Stocks plunge 3.1pc as India tensions spur selloff

By Staff Reporter

KARACHI: Pakistan’s benchmark stock index plummeted over three percent on Wednesday as investors scrambled to price in geopolitical risks after the government warned of potential Indian military strikes, escalating tensions between the nuclear-armed rivals.

The KSE-100 share index tumbled 3.1 percent to close at 111,326.57. The gauge erased 3,546 points, with losses accelerating through the day. Volumes surged to a three-week high as panicked offloading dominated trade.

The selloff followed Information Minister Attaullah Tarar’s late-Tuesday statement that the country possesses “credible intelligence” India plans military action within 24–36 hours.

New Delhi had earlier vowed retaliation for a April 22 attack in occupied Kashmir that killed 26 tourists, which it blamed on Pakistan without providing evidence.

“The local equity market suffered a sharp and broad-based decline today as intensifying geopolitical tensions sent shockwaves through investor sentiment,” brokerage Topline Securities Ltd. wrote in a note. Chief Executive Mohammed Sohail cited fears of an “imminent attack” as the trigger.

Pakistan’s dollar bonds slid, led by a 1.3-cent drop in the 2036 note to 71.85 cents. The equity rout defied Tuesday’s 1.3 percent rally driven by IMF board meeting announcement, underscoring how geopolitical shocks are derailing momentum from a $7 billion bailout program.

“Investors are worried about potential Indian military action against Pakistan, concerns that have intensified following the information minister’s press briefing,” said analyst Awais Ashraf at brokerage AKD Securities. “The market in the short term will most likely follow news flows of Pakistan-India tensions.”