ISLAMABAD – The Pakistan Stock Exchange (PSX) witnessed a dramatic fall on Wednesday as rising geopolitical tensions between India and Pakistan sent shockwaves across financial markets. A late-night warning from the federal government about a possible Indian military strike within 24 to 36 hours triggered panic-led selling.
KSE-100 Index Plunges Over 3,500 Points
The benchmark KSE-100 Index closed at 111,326.57, marking a massive drop of 3,545.61 points or 3.09% compared to the previous close of 114,872.18.
During the session, the market hit an intraday low of 110,631.84, reflecting a total loss of 4,240 points, or 3.69%. Even the day’s highest level of 114,066.12 was down by 806 points, highlighting intense bearish momentum throughout the day.
Read: Pakistan Air Force Forces Indian Rafale Jets to Retreat in IIOJK
Geopolitical Tensions Trigger Market Panic
Investor anxiety peaked after Information Minister Attaullah Tarar issued a televised warning late Tuesday. He said Pakistan had credible intelligence that India was planning military aggression on false pretexts related to the recent Pahalgam incident in Indian Illegally Occupied Jammu and Kashmir (IIOJK).
“This is causing people to flee to safety and exit the equities for the time being,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.
Experts Warn of Continued Volatility
Topline Securities CEO Mohammad Sohail agreed that the tension has rocked investor sentiment.
“Investors are cautious due to this uncertainty. Markets don’t like surprises, especially those involving threats of war,” he said.
Market experts believe unless the situation de-escalates quickly, more sell-offs could occur, especially from foreign investors and high-net-worth individuals.
SBP Moves to Strengthen Forex Reserves
While the equity market remained under pressure, the State Bank of Pakistan (SBP) released encouraging data on the external front. The central bank revealed it had purchased $5.677 billion from the interbank market between June 2024 and January 2025 to support its foreign reserves.
In January 2025 alone, the SBP bought $154 million, down from $536 million in December 2024, as the current account showed improvement.
PPL Posts Lower Profit, Dividend Announced
In corporate earnings, Pakistan Petroleum Limited (PPL) reported a 25% year-on-year decline in net profit for the nine months ending March 2025, posting Rs72.7 billion in earnings.
Quarterly profits also fell 21% YoY to Rs21.8 billion, while net sales declined 15% YoY. However, PPL announced a dividend of Rs1 per share for Q3, bringing total payouts to Rs5 per share for 9MFY25.
Tuesday’s Rally Reversed Completely
The steep decline reversed Tuesday’s optimism, when the PSX had posted a gain of 808.28 points, closing at 114,872.18.
