Pakistan's Karachi Stock Exchange tumbles 2% after India's actions over Pahalgam terror attack

Pakistan's Karachi Stock Exchange tumbles 2% after India's actions over Pahalgam terror attack.

Pakistan's equity markets witnessed a sharp fall on April 24 as rising geopolitical tensions with India rattled investor sentiment, days after a deadly terror attack in Kashmir’s Pahalgam.

The benchmark KSE-100 index  dropped as much as 2.12 percent, or 2,485.85 points, in early trade. The decline came after India’s Cabinet Committee on Security (CCS)  cleared a set of retaliatory actions aimed at Pakistan.

These measures include suspension of the Indus Waters Treaty signed in 1960 and immediate closure of the Attari land transit post, among others.

The Indian response follows the April 22 terror attack at Baisaran, near the popular hill town of Pahalgam in Jammu and Kashmir, where 26 people — mostly tourists — were killed. Baisaran, often referred to as ‘Mini Switzerland’, is a frequent stop for domestic and international visitors.

By 2 PM IST, the KSE-100 index had recovered some losses but was still trading lower by 1,532.42 points or 1.31 percent at 115,693.72, reflecting the market’s nervousness over any further escalation.

This is the second straight session of losses for the Karachi bourse. On Wednesday, the index had slipped 1,204 points after the International Monetary Fund (IMF) trimmed Pakistan’s GDP growth forecast for FY25 to 2.6 percent, citing fiscal risks and continued external vulnerabilities.

The recent sell-off comes despite a stellar run in 2024. Pakistan's about $50 billion stock market had delivered returns of 84 percent last year. Brokerage firm Intermarket Securities had forecast a 40 per cent upside for the KSE-100 in 2025, according to Bloomberg.

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