Pakistan investors spooked, PSX crashes 3,000 points amid fears of retaliation by India

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Pakistan stock market on Wednesday crashed over 3,000 points amid fears that India is planning a strong retaliation after the deadly Pahalgam attack in Jammu and Kashmir.

At 4pm, the benchmark KSE-100 index plunged 3,519.24 points, or 3.06 per cent, to stand at 111,352.94 from the last close of 114,872.18 at 9:53am.

Experts attributed the fall in markets to the news of "likely attack" by India in the next few days.

“Investors are worried about potential Indian military action against Pakistan, concerns that have intensified following the information minister’s press briefing," an expert told Dawn.

He was referring to the statement by Pakistan's information minister Attaullah Tarar who cited “credible intelligence” to claim that India was planning a military action against Pakistan in the next 24 to 36 hours. However, he did give any evidence to back the claim.

Another investor said that the Pakistan market in the short term will take cues from the news reports about India-Pakistan tensions.

Meanwhile, Pakistan’s international bonds also dropped over 1 cent after the information minister’s statement.

The 2036 bond saw the biggest decline, falling 1.3 cents to be bid at 71.85 cents in the dollar, Dawn reported citing Tradeweb data.

India has already announced a series of diplomatic actions in the aftermath of the attack, including the suspension of Indus Water Treaty (IWT) and the revocation of visas.

On Wednesday, PM Modi chaired a meeting of the crucial Cabinet Committee on Political Affairs (CCPA) at his 7, Lok Kalyan Marg residence.

Widely considered as the most powerful among all cabinet committees, the CCPA is often dubbed as the ‘Super Cabinet’. Apart from CCPA, PM Modi today also chaired strategically important Cabinet Committee on Economic Affairs (CCEA) and Cabinet Committee on Security (CCS) meetings in the wake of April 22 terror attack in Pahalgam, which left 26 dead.