The Pakistan Stock Exchange (PSX) was forced to halt trading on Thursday, May 8, after the KSE-100 Index plunged by 7% during the session. At 1:31 pm, the index was down 6,948.73 points, or 6.32%, trading at 103,060.3. This sharp decline triggered the market’s circuit breaker mechanism, halting activity to prevent further panic-driven sell-offs.
Brief Rebound Fails to Hold
Earlier in the trading session, the market had shown signs of resilience, surging nearly 1,800 points in early trading. The temporary recovery was fueled by investor optimism over potential de-escalation in geopolitical tensions following Wednesday’s turmoil. However, this rebound proved short-lived as fresh waves of selling pressure overwhelmed any early gains.
Geo-Political Escalation Sparks Panic
The back-to-back crashes follow the announcement of a major Indian military operation — Operation Sindoor — carried out in response to a deadly terror attack in Pahalgam. According to reports, the operation targeted nine sites allegedly linked to terrorist networks: four within Pakistan’s borders and five in Pakistan-occupied Kashmir (PoK).
The news sent shockwaves through financial markets, with Wednesday, May 7, marking one of the worst days in the PSX's history. The KSE-100 Index dropped over 6,500 points, erasing nearly 6% of its value and closing at 107,007. Thursday’s decline has only deepened the crisis, fueling concerns of a prolonged period of instability.
Investor Sentiment Remains Fragile
Market participants are now grappling with heightened uncertainty. Analysts suggest that unless clear signs of diplomatic engagement emerge between India and Pakistan, investor confidence is unlikely to return in the near term. Foreign investors have reportedly begun pulling funds amid the escalating risk.
Authorities have yet to announce when trading will resume, and the PSX has urged investors to remain calm. However, with geopolitical tensions running high, financial volatility appears far from over.
