Pakistan Stock Exchange Crashes Over 2,500 Points Amid Rising Tensions with India

The Pakistan Stock Exchange (PSX) opened to chaos on Thursday, with the benchmark KSE-100 index tumbling by over 2,500 points in the first five minutes of trade, reflecting widespread panic over escalating geopolitical tensions with India.

The market nosedived 2.12%, reaching 114,740.29 before any signs of recovery emerged. The sudden plunge came after India took the unprecedented step of suspending the Indus Waters Treaty—a vital 1960 water-sharing accord—with Pakistan. This decision followed a deadly terror attack in Indian-administered Kashmir, which India blamed on Islamabad.

In a string of retaliatory measures, India expelled Pakistani defense personnel, closed the Wagah border crossing, and revoked SAARC visa exemptions. Foreign Secretary Vikram Misri announced the suspension of the treaty at a press conference, stating it was not just symbolic but a strong message of India’s “growing impatience with provocations.”

Investor sentiment collapsed almost instantly. “This drop is a direct result of rising fears that the crisis could escalate into something more serious,” said a Karachi-based market analyst.

Commercial Banks led the plunge, dragging the index down by nearly 700 points. Other significant losers included Oil & Gas, Cement, and Fertilizer sectors. Stocks such as BWCL (-10.00%), AGL (-8.40%), and EFUG (-8.38%) were among the worst-hit.

While the market clawed back 1,664 points during the session, it still closed well below the 117,000 mark, ending the day at 116,221. Analysts warned that volatility will likely persist in the coming days unless regional tensions begin to ease.