Pakistan’s benchmark KSE-100 Index staged a partial recovery on Wednesday after plunging over 6,500 points at the open, with market sentiment rattled by the military escalation between India and Pakistan in over two decades.
The index touched an intraday low of 107,007.68 before closing at 110,009.02, down 3,559.48 points or 3.13%. The sharp dip followed news of Indian missile strikes on Pakistani territory and retaliatory military action by Pakistan.
Across-the-board selling was witnessed in major sectors, including commercial banks, oil and gas exploration, oil marketing, and power generation. Index-heavy stocks like OGDC, PPL, POL, HUBCO, and SNGPL all traded in the red.
“The sharp rebound of over 4,500 points reflects underlying market confidence, driven by strong economic fundamentals and expectations that tensions will de-escalate quickly after the comment by the United States Secretary of State,” said Waqas Ghani, Head of Research at JS Global.
Mohammed Sohail, CEO of Topline Securities, echoed this view, stating: “After the latest offensive, there will be no major escalation between the two neighbours, and dust will eventually settle down.”
He added that investors are also optimistic ahead of the upcoming International Monetary Fund (IMF) board meeting, which could approve the next loan tranche for Pakistan.
The recent market turmoil follows cross-border violence that saw at least 26 Pakistanis killed and 46 injured after Indian missile strikes hit six locations, including Bahawalpur, Muzaffarabad, and Kotli.
Director General of Inter-Services Public Relations (DG ISPR), Lieutenant General Ahmed Sharif Chaudhry, earlier said on Wednesday that the Pakistan army downed five Indian fighter jets and one combat drone in response to unprovoked aggression.
The National Security Council authorised “corresponding actions” and vowed that sovereignty would be protected.
On Tuesday, the KSE-100 had closed 534 points lower at 113,568.51, erasing nearly 1,000 points of intraday gains.
Globally, investor mood was buoyed by a planned meeting between top US and Chinese trade officials. S&P 500 futures rose 0.9%, while China’s Hang Seng and blue-chip indices saw modest gains after Beijing cut interest rates and loosened bank reserve requirements to inject liquidity.
Despite the domestic selloff, analysts maintain that the broader economic trajectory, backed by structural reforms and IMF support, remains intact.
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