In an unprecedented financial blow, the Pakistan Stock Exchange (PSX) experienced its worst single-day crash in history on Thursday, following the escalation of border tensions. The benchmark KSE-100 index nosedived by a staggering 6,482 points, reflecting intense investor anxiety and widespread panic selling triggered by rising geopolitical risks.
The massive sell-off came in the wake of mounting hostilities, as the Inter-Services Public Relations (ISPR) confirmed that Pakistan’s military had intercepted and destroyed 25 Israeli-made drones that had entered Pakistani airspace since the previous night. The military’s statement emphasized its readiness and capability to counter aggression, declaring that the Pakistan Army was “crushing all nefarious designs” of the enemy and stood fully prepared to defend the nation’s sovereignty.
This dramatic turn of events sent shockwaves through the financial markets, with investor confidence crumbling within hours of trading. The KSE-100 index closed at 103,527 points, reflecting a 6.26% drop from the previous session and marking the worst point-wise decline in the exchange’s history. This crash broke the earlier record set on December 19, 2024, when the index fell by 4,795 points amid political instability.
Trading volumes also surged as panic gripped the market. A total of over 651 million shares were exchanged, significantly higher than the 550 million shares traded during the prior session. The total value of traded shares jumped to Rs. 35.4 billion, up from Rs. 30.12 billion, as institutional and retail investors rushed to offload positions in a bid to minimize losses.
Out of the 450 companies that participated in trading, only 35 managed to post gains, while a staggering 373 recorded losses. The share prices of 42 companies remained unchanged, indicating limited buying interest and overall market paralysis in response to the conflict news.
Analysts and market observers have described the crash as a direct consequence of geopolitical volatility rather than economic fundamentals. The border situation, combined with fears of potential escalation into a broader military conflict, has triggered a risk-off sentiment across the domestic investment landscape. Many investors chose to liquidate their positions and shift to safer assets, exacerbating the downward pressure on stocks.
Market experts warn that continued geopolitical uncertainty could keep the market under pressure in the coming sessions. They emphasize the importance of diplomatic engagement to de-escalate tensions and restore investor confidence. Additionally, the government and regulatory bodies may need to step in with temporary stabilizing measures if the situation deteriorates further.
The PSX has historically reacted strongly to political and military developments, and Thursday’s record-breaking drop underscores the fragile relationship between geopolitical stability and market performance in Pakistan. For now, investors remain on edge, closely monitoring the situation for signs of resolution or further escalation.