War is a growing concern across Europe – Statista
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Pakistani stocks have suffered a steep decline, with the KSE-100 Index dropping 9.7% over the past four sessions, as escalating military tensions with India rattled investors, Economic Times reported on May 8.
On the same day, trading at the Pakistan Stock Exchange was suspended for an hour after the benchmark index slumped 6.3%, triggered by reports that multiple drones had been shot down over major cities including Karachi and Lahore.
In a separate report, India Today cited market analysts who said that selling pressure mounted after reports emerged that Pakistan’s military had downed 12 drones allegedly launched from India. The Pakistani military claimed the drones violated its airspace a day after India conducted missile strikes on terror targets inside Pakistan and Pakistan-occupied Kashmir under “Operation Sindoor”.
Adnan Sheikh, Head of Research at Pak Kuwait Investment Company, said that reports of drones being shot down in major cities including Karachi and Lahore pushed the market down more than 6%, which resulted in a halt, according to India Today.
Pakistan’s international bonds also came under pressure. Trade data showed that the 2036 bond fell by more than one cent, now trading at 73.8 cents on the dollar, reflecting investor anxiety over the potential for a wider military escalation.
Commenting on the situation, Jim Reid, global head of macro and thematic research at Deutsche Bank, said that the prevailing situation has raised fears about an escalation between the two countries, India Today reported.
India’s Sensex index fell by about 138 points on May 8, although analysts noted that the Indian market remained relatively composed compared to the turmoil in Pakistan.
India’s recent military action followed a terror attack in Pahalgam, Jammu and Kashmir, in late April that killed 26 civilians. In response, Indian forces launched missile strikes on nine locations inside Pakistan and Pakistan-occupied Kashmir, reportedly targeting Bahawalpur, Kotli, Muzaffarabad, Muridke, Gulpur, Bhimber, Bagh, Chak Amru and Sialkot.
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