Pakistan Stock Market Suffers 2% Drop Due to Escalating Tensions with Afghanistan

Pakistan Stock Market Plunges Following Escalation of Tensions with Afghanistan

The KSE-100 index, Pakistan's benchmark stock index, experienced a significant decline of 1.82% on Friday, resulting in a loss of 3,081 points and reaching an intraday low of 165,811.88. The index later recovered some of its losses, trading at 168,062.17, a decline of 0.5% post noon.

The decline in the stock market was driven by heavy profit booking in various sectors, including automobile assemblers, cement, commercial banks, fertiliser, and oil and gas exploration stocks.

The escalation of tensions between Pakistan and Afghanistan was triggered by a statement from Defence Minister Khawaja Mohammad Asif, who announced that Pakistan now considers itself in an "open war" with Afghanistan following cross-border strikes by both sides. This decision was made after Pakistan carried out airstrikes in Kabul, Kandahar, and Paktia province in response to Afghan cross-border attacks.

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The conflict comes months after a ceasefire was mediated by Qatar and Turkiye, and has resulted in differing casualty figures and claims of inflicted losses from both governments. The Afghanistan Defence Ministry reported that 55 Pakistani soldiers were killed, while 8 Afghan soldiers were killed and 11 wounded. The ministry also claimed to have destroyed 19 Pakistani army posts and 2 bases.

The tensions between Pakistan and Afghanistan have had a significant impact on the country's stock market, highlighting the potential risks and uncertainties associated with regional conflicts.