Pakistan Stock exchange Suffers Historic Plunge Amidst border Clashes & Domestic Unrest
Karachi,Pakistan – The Pakistan Stock Exchange (PSX) experienced a dramatic downturn on Monday,plummeting by 4,654.77 points – a 2.85% decline – to close at 158,443.42. The sharp drop was triggered by escalating tensions with Afghanistan following weekend border skirmishes and a goverment crackdown on the Tehreek-i-Labbaik Pakistan (TLP).
The KSE-100 index opened at 163,098.19 points before the sell-off intensified. Of the 482 listed companies,74 saw gains,while 375 declined and 33 remained unchanged.
The decline follows a week of pressure on the PSX, fueled by concerns over a delayed staff-level agreement with the International Monetary Fund (IMF), broader geopolitical tensions, and profit-taking.
intense clashes between Pakistani forces and the Taliban along the border began late Saturday night and continued into Sunday morning. The Inter-Services Public Relations (ISPR) reported that 23 Pakistani troops were martyred and 200 Taliban and affiliated terrorists were killed in response to aggression from Kabul.
Adding to the market’s woes, authorities launched a crackdown on TLP protesters who had camped in Muridke after their route to Islamabad was blocked.
“the new week opened on a sour note amid weekend reports of retaliatory action along the Afghan border and Friday’s global equity declines; risk aversion deepened as government measures against TLP fueled rumours of broader unrest,” explained yousuf M. Farooq, director of research at Chase Securities.
Farooq advised investors to focus on long-term strategies aligned with their risk tolerance and liquidity needs, emphasizing disciplined asset allocation. “While valuations are not excessive, prospective returns are likely to normalise; the outsized gains seen over the past two years are unlikely to be repeated over the next two,” he stated.
Last week, the KSE-100 index fell by nearly 3.5%. Selling pressure in insurance stocks, with a net sell of $25 million, and geopolitical risks, including a blast in Kabul, further contributed to the negative sentiment.
Major contributors to Monday’s decline included Engro Holdings, Systems Ltd, MCB Bank, Habib Bank, and Engro Fertiliser, collectively dragging the index down by 732 points.
