Pakistan Stock Exchange: Lahore, Karachi explosions send KSE100 tumbling; trading halted

Trading on Pakistan Stock Exchange was halted for an hour on Thursday amid intensifying India-Pakistan tensions. KSE100, the benchmark index at Pakistan Stock Exchange, plunged over 6 per cent earlier in the day amid reports loud explosions were heard in Karachi and Lahore -- a day after India's Operation Sindoor. This raised tensions in Pakistan that India's response to the Pahalgam terror attack was yet to be concluded.   

KSE100 tumbled 6,948.73 points, or 6.32 per cent, to 103,060.30, before the trading was halted. The domestic stock market was unfazed, with benchmarks Sensex and Nifty trading more or less flat. 

A Reuters report today quoting Pakistani military suggested that Pakistan shot down 12 drones from India that violated its airspace. As per the report, India sent Israeli Harop drones to multiple locations, including the two largest cities of Karachi and Lahore, and their debris is being collected, Reuters attributed Pakistan military spokesperson Ahmed Sharif Chaudhry as saying.

"Uncertainty regarding the extent of an expected face-saving response from Pakistan to India’s Operation Sindoor will weigh on markets. From the market perspective, it is important that the conflict should not escalate," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

On May 7, India launched Operation Sindoor on nine terror targets in Pakistan and Pakistan-occupied Kashmir. The Pakistan foreign ministry later confirmed strikes in Bahawalpur, Kotli, Muzaffarabad and Muridke. Gulpur, Bhimber, Bagh, Chak Amru and Sialkot were some additional sites reportedly hit by Indian missiles. 

The missile attack was the first such move since the 1971 war when India’s Army, Navy, and Air Force launched joint precision strikes on nine terror hubs in Pakistan and PoK. 

Following the Operation Sindoor, Pakistan's Karachi 100 index had 3,559.48 points or 3.13 per cent to settle at 1,10,009.03 on Wednesday. 

A total of 20 tourists were killed in the Pahalgam terror attack. It was the most severe terror incident in India since the 2019 Pulwama bombing that killed 40 CRPF personnel.

Emkay Global said while India’s strong response to the Pahalgam terror attacks has raised the specter of escalated conflict with Pakistan but ]it is unlikely to affect markets. It, however, acknowledged that this is an unpredictable situation and that it would re-calibrate its market views if developments trigger a change in the base case assumption.