Karachi, May 8 – Pakistan’s benchmark stock index, the KSE-100, experienced a sharp crash of over 6 percent on Thursday amid unverified rumors of an Indian military strike near Karachi. The speculation caused panic among investors, leading to a massive sell-off and a temporary halt in trading for one hour.
As per agency report, before trading was paused, the KSE-100 index had dropped by 6,948.73 points, or 6.32 percent, to settle at 103,060.30. Although the rumors were later proven to be baseless, the damage had already been done as market sentiment was deeply shaken by the uncertainty surrounding the ongoing geopolitical tensions between India and Pakistan.
Fatima Bucha of AKD Securities confirmed that trading resumed once the panic subsided slightly. However, she warned that investor anxiety remains high, with no clear indication of how Pakistan may respond to India’s recent show of military strength. “No one is sure what will happen next,” she said, reflecting broader concerns over the regional crisis.
The steep fall was largely driven by declines in major sectors such as cement, energy, banking, and technology, which collectively dragged the index down.
In response to the turmoil, the Pakistani government announced steps to stabilize its foreign exchange reserves. Effective immediately, the Ministry of Commerce has imposed a 60-day ban on the import and export of precious metals, gems, and jewelry. This temporary restriction suspends the provisions of SRO 760 of 2013, which governs the trade of valuable metals.
Additionally, the State Bank of Pakistan has informally advised currency dealers to closely monitor dollar outflows in both inter-bank and open markets, anticipating a surge in demand for U.S. dollars if the situation escalates further.
