Karachi Stocks Dive 8,000 Points Since Pahalgam Attack, Risk Further Decline

Speedy Summary

• Pakistan’s KSE-100 index experienced a major downturn, falling 8,000 points or 6.09% between April 22 and April 30.
• On April 30 alone, the index dropped by 3.09% (3,545 points) to close at 111,326.57; blue-chip stocks like LUCK, ENGROH, UBL, PPL, and FFC led the losses.
• The index recovered on May 2 by gaining back 2,179.80 points (1.96%), closing at 113,506.38 due to profit-taking activities but remains vulnerable if tensions persist between India and Pakistan.
• The sharp decline followed the Pahalgam terrorist attack in India on April 22 that killed 26 people; initially claimed by Lashkar-e-Taiba’s affiliate group but later rescinded.
• In retaliation for the attack:

– India put the Indus Waters Treaty in abeyance and closed borders with Pakistan (attari-Wagah). It also asked short-term visa holders from Pakistan to leave Indian territory.- Islamabad countered by suspending the Shimla Agreement of 1972 and shutting its airspace to Indian flights while escalating military activity near LoC-leading to cross-border skirmishes.

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indian Opinion Analysis
The steep plunge of Pakistan’s KSE-100 highlights vulnerabilities within its financial system during geopolitical instability with India post-Pahalgam attack tensions.This reaction suggests deep interconnectedness between security concerns and economic health within South Asia-a region marked by ancient volatility.

India’s retaliation measures such as freezing key agreements like Indus Waters Treaty alongside border closures amplified pressure on bilateral relations yet contributed indirectly to economic shifts in Karachi Stock Exchange performance as evidenced hear.

For policymakers in both countries maintaining essential cross-border ties-e.g., trade-water-offers areas requiring mutual prioritization longer term toward stabilising basic coexistence essentials yet unclear resolution escalations present growing counter-friction risks meantime tightening hitting broader implications