Karachi, May 7, 2025 – The Pakistan Stock Exchange (PSX) experienced significant volatility today as the benchmark KSE-100 Index plunged over 6,500 points in early trading, reacting to heightened tensions between Pakistan and India. However, the index managed to recover a substantial portion of its losses by mid-morning.
Market Turmoil Amid Cross-Border Escalation
At the opening bell, the KSE-100 Index dropped sharply, shedding more than 6,500 points. By 9:30 AM, it had fallen to 107,007.68, marking a 5.78% decline . This steep decline was attributed to escalating military actions between the two nuclear-armed neighbors. Indian missile strikes targeted multiple locations in Pakistan, including Bahawalpur, Kotli, and Muzaffarabad, resulting in at least eight fatalities and 35 injuries, according to the Director General of Inter-Services Public Relations (DG ISPR), Lt Gen Ahmed Sharif Chaudhry. In retaliation, Pakistan’s military reportedly shot down five Indian Air Force jets .Profit by Pakistan Today
Partial Recovery Amidst Investor Optimism
Despite the initial plunge, the market began to recover later in the morning. By 10:12 AM, the KSE-100 Index had rebounded to 111,249.05, reducing the loss to 2,319.45 points or 2.04% . Analysts attributed this rebound to investor optimism fueled by statements from U.S. officials urging de-escalation and the anticipation of upcoming economic support measures.Profit by Pakistan Today
Sector-Wide Impact
The sell-off affected major sectors across the board, including commercial banks, oil and gas exploration companies, oil marketing companies, power generation, and refineries. Key stocks such as OGDC, PPL, POL, HUBCO, SNGPL, and SSGC traded in the red during the early session .Profit by Pakistan Today
Global Market Reactions
International markets showed mixed reactions. U.S. stock futures and Chinese markets rose on Wednesday, as investors responded positively to news of a meeting between top U.S. and Chinese trade officials and China’s decision to cut interest rates and support stock markets .Business Recorder
Outlook
While the partial recovery of the KSE-100 Index indicates underlying market resilience, the situation remains fluid. Investors are closely monitoring geopolitical developments and upcoming economic policy decisions, including the anticipated IMF board meeting, which may influence market stability in the coming days.
This article is based on information available as of May 7, 2025. For the latest updates, please refer to official sources and financial news outlets.
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