Pakistan stocks fall by 2.68% on rising tensions with India

The Pakistan Stock Exchange fell by over 1,800 points during intraday trade on Wednesday due to rising tensions between Pakistan and India.

The benchmark KSE-100 index shed 3,079.57 points or 2.68% to trade at 111,792.61 points around 11:18 AM.

The development comes after Pakistan’s Information Minister Attaullah Tarar, claimed in an early morning statement on Wednesday Islamabad had “credible intelligence” that India was planning a military strike within the next 24 to 36 hours, using a recent deadly attack in Kashmir as a "false pretext."

The April 22 attack in Pahalgam, a tourist town in Indian-administered Kashmir, left 26 civilians dead — the deadliest in years. India has blamed Pakistan for supporting the attackers, a claim Islamabad strongly denies.

Tensions are already high along the Line of Control (LoC), where India’s army said it had exchanged gunfire with Pakistani troops for a sixth consecutive night. Pakistan has not confirmed the clashes, though state radio reported that it had shot down an Indian drone in what it called a violation of its airspace. No date or further details were provided, and India has not commented on the alleged drone incident.

On Tuesday, Indian Prime Minister Narendra Modi held a closed-door meeting with army and security chiefs, granting them "complete operational freedom" to respond, according to a senior government source.

An analyst told Nukta the rising tensions had brought down sentiments. However, fundamentals are strong, corporate earnings are in line with expectations, IMF board meeting is scheduled for May 9, and government assurance to keep economic reforms agenda intact, are positives.