Pakistan's benchmark, the KSE-100 index crashed nearly 6% as it opened for trade on May 7, as fear of worsening geopolitical crisis struck investors after India launched ‘Operation Sindoor’ that targeted multiple locations in the country and Pakistan Occupied Kashmir.
The Indian Army announced launching targeted military strikes across nine locations in Pakistan and Pakistan Occupied Kashmir, focusing on sites that housed terrorist outfits. The Indian Army, in its press release, stated that the military action came in the wake of the barbaric Pahalgam terrorist attack in which 25 Indians and one Nepali citizen were murdered.
“We are living up to the commitment that those responsible for this attack will be held accountable. Our actions have been focused, measured and non-escalatory in nature. No Pakistani military facilities have been targeted. India has demonstrated considerable restraint in selection of targets and method of execution,” the Indian Army said.
In response, Pakistan has described India's retaliation as an "act of war,” promising to respond to the action at a "time and place of its choosing".
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In stark contrast, the stock market back home, though volatile, still remained much more resilient. The benchmarks did start off on a shaky footing, however, losses were quick to be trimmed, with the Sensex and Nifty even jumping in the green for a brief period.
Pakistan’s stock exchange had also taken a blow in late April after the Pahalgam terror attacks in Kashmir, intensified tensions with neighbouring India intensified. In response to the terror attacks that India blamed on Pakistan, New Delhi announced a series of hard measures to revoke ties with Islamabad.
These included the suspension of the Indus Waters Treaty, immediate closure of the Wagah-Attari border, and the revocation of visa exemptions for Pakistani nationals under the SAARC framework.
