Operation Sindoor: Pakistan's KSE 100 Nosedives Over 7.5 Per Cent, Trading Halted At PSX

Pakistan temporarily suspended trading at its stock market on May 8 after its benchmark KSE 100 index nosedived over 7.5 per cent on May 8, extending losses for the second straight day following India's military attack on terrorist hideouts in the country.

The KSE 100 index gave a gap-up opening at 110,989.70 today; however, later in the day, it saw a sharp reversal during the session, tumbling to an intraday low of 101,598.91. This has come after a nearly 6 per cent crash on May 7, though the market had managed to pare some losses by the close of that session. Overall, in the previous two sessions, the KSE 100 index has crashed around 10 per cent.

Post-Midnight on May 7, India had carried out military operations under the codename 'Operation Sindoor', targeting nine terrorist hideouts across Pakistan and Pakistan-occupied Kashmir. The military operations by India were carried out in response to the deadly terrorist attack in Pahalgam, Kashmir, which had claimed 26 innocent lives.

India's Market Stays Resilient

Since April 22, the KSE 100 index has corrected over 14.2 per cent. On the other hand, Indian stock market has remained resilient, with the benchmark Nifty 50 index inching up around 0.5 per cent over the same period.

According to analysts at brokerage firm Anand Rathi, the probability of a full-scale conflict between the two neighbouring countries is low as both nations, despite the heated rhetoric, have typically avoided escalation beyond tactical thresholds. The brokerage firm, in a note dated May 8, also said that investors have now become adept at distinguishing noise from fundamentals. "Earnings, liquidity, policy direction and macro stability continue to drive flows, and not border tensions," it said.

Equity and foreign portfolio investors (FPI) data also show that even in peak crisis moments, markets have rebounded swiftly. "Since the 1990s, several high-stake India–Pakistan episodes—from Kargil and Parliament attacks to Uri and Pulwama—have tested nerves. But the Sensex has consistently demonstrated a remarkable immunity to sabre-rattling. Market corrections, if any, have been modest, short-lived and largely sentiment-driven. Fundamentals have prevailed," it said.