Pakistan’s market is highly sensitive to investor sentiment and has lower liquidity, which makes it more susceptible to significant downturns when risk perceptions increase. With fewer listed companies and limited participation from long-term investors, geopolitical events tend to have a more pronounced impact on the market.
On May 6, the Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index was hovering around 111,000 points. On May 7, Pakistan’s benchmark equity index, the KSE-100 Index, fell as much as 5.7 per cent, marking its largest drop since 2021, before recovering slightly to a loss of 3 per cent.
As of May 8, the index stands at 103,060.30 points. This decline of approximately 7,940 points or around 7.15 per cent over the span of two days shows the stark impact of Operation Sindoor on investor confidence in Pakistan.
Trading on PSX has been suspended due to the the steep fall.
More to come