Pakistan Stock Market Crashes Amid Rising Tensions with India; Trading Halted

New Delhi, 8th May 2025: The Pakistan Stock Exchange (KSE) witnessed a historic crash on Thursday as geopolitical tensions with India escalated following the deadly terrorist attack in Pahalgam on April 22 and India’s subsequent military response. The KSE-100 index plunged by over 7,900 points in a single day, forcing authorities to halt trading temporarily.

According to market data at the time of reporting, the benchmark KSE-100 index was trading at 102,983.21, down from 118,811 on April 23, marking a total decline of over 15,800 points — the sharpest fall in recent memory.

Investors Panic Amid Conflict Fears
The massive sell-off reflects investor panic in Pakistan as fears grow of a prolonged conflict with India. The drop of 7,000 points in a single day triggered lower circuit breakers, effectively suspending trading to contain market volatility.

Earlier, between April 23 and May 7, the KSE had already shed around 6,000 points, showing a consistent downward trajectory in investor sentiment after India launched Operation Sindoor—a targeted airstrike campaign against nine terror outfits operating in Pakistani territory.

India’s Markets Remain Stable
In contrast, Indian markets have remained relatively stable. The BSE Sensex, which was at 80,746 on April 23, stood at 80,116 at 3:13 PM today, showing only a marginal dip. Analysts suggest that the limited impact on Indian markets may be due to investor confidence in the Indian economy and the perception of a swift and decisive military response.

Largest Drop Since 2020
This marks the biggest decline in the Pakistani stock market since the global pandemic crash of 2020. Market analysts are now concerned about further capital outflows, a possible downgrade in investor ratings, and added pressure on Pakistan’s already strained economy.

Background: Rising Tensions After Pahalgam Attack
On April 22, a major terrorist attack in Pahalgam, Jammu & Kashmir, resulted in multiple casualties, prompting a strong retaliatory response from India. India accused Pakistan-based terror outfits of orchestrating the attack and launched airstrikes across the border the following day, escalating diplomatic and military tensions.

As of now, regional stability remains fragile, and investors are bracing for further uncertainty in the days ahead.