The Pakistani stock market fell sharply on Thursday, May 8, when heightened tensions with India provoked a bout of panic selling that saw the benchmark index drop 6.3% in intraday trade. The sharp drop resulted in an initial suspension of trading on the Karachi Stock Exchange, as reported by Reuters.
Fourth Consecutive Day of Market Declines
This is the fourth session of falls in a row for Pakistani stocks. The continuous fall indicates increased investor concern over the worsening security environment in the country.
Earlier, the market had already plummeted sharply after India carried out military attacks in multiple locations in Pakistan and Pakistan-occupied Kashmir. The attacks followed a terrorist attack on Indian civilians in Pahalgam towards the end of April that resulted in 26 fatalities.
Earlier Day Also Experienced Sharp Declines
The stock market in Pakistan saw a sharp decline on Wednesday when the index fell as much as 5.77% during trading. But it recovered later to close 3.13% down by the end of the session.
Market Volatility Likely to Persist
As regional tensions continue to be high, analysts predict sustained volatility in the financial markets. The sell-off is an indication of increasing fear about geopolitical uncertainty and its ability to affect investor confidence and economic stability in Pakistan.
