PSX
The Pakistan Stock Exchange (PSX) witnessed a rollercoaster session on Wednesday as escalating military tensions between Pakistan and India triggered panic selling, sending shockwaves through the market.
The benchmark KSE-100 Index nosedived by more than 6% during early trading hours before partially recovering by midday, buoyed by investor optimism surrounding the upcoming International Monetary Fund (IMF) board meeting.
In the morning session, the KSE-100 Index plunged to an intraday low of 107,007.68 points, a steep decline of 6,560.82 points or -5.78% from the previous day’s close of 113,568.50. However, the market later regained some ground, climbing back to 112,457.37 points, reducing the net loss to 1,111.13 points, or -0.98%.
Topline Securities CEO Mohammed Sohail commented on the market movement, saying, “The PSX fell sharply at the open but has since staged a significant recovery. Many market participants believe that the conflict will not escalate further and that tensions between the two countries will eventually cool down.”
The initial sell-off was driven by news of cross-border hostilities. According to military sources, Indian forces launched aerial strikes targeting civilian and strategic sites in Punjab and Azad Jammu and Kashmir.
In response, the Pakistan Air Force conducted retaliatory operations, reportedly downing five Indian fighter jets—three Rafale jets, a Su-30MKI, and a MiG-29—as well as a combat drone. Key Indian military installations, including brigade headquarters and posts along the Line of Control (LoC), were also reportedly destroyed.
ISPR Director General Lt Gen Ahmed Sharif Chaudhry confirmed that all Pakistani aircraft returned safely from the operations. However, the attacks resulted in the martyrdom of at least 26 Pakistani civilians and injuries to 46 others.
India claimed the strikes were in retaliation for the deaths of over two dozen tourists in Indian Illegally Occupied Jammu and Kashmir (IIOJK), an incident it blames on Pakistan. Islamabad has categorically rejected the allegations.
Despite the volatile geopolitical climate, the market found a silver lining in anticipation of the IMF Executive Board meeting scheduled for May 9. Investors are hopeful that Pakistan will secure the next $1.3 billion tranche under the Extended Fund Facility (EFF), following a staff-level agreement reached in March.
The meeting will also consider Pakistan’s request for modifications to performance criteria and access to funding under the Resilience and Sustainability Facility (RSF). If approved, the latest disbursement would raise total receipts under the 28-month, $7 billion bailout to nearly $2 billion.
This cautious optimism helped ease investor anxiety, with traders choosing to focus on the country’s economic stability amid heightened regional insecurity.
