KARACHI – Investors are buckle amid tensions between Pakistan and Indian after Pahalgam attack. On Thursday, Pakistan Stock Exchange (PSX) witnessed a sharp downturn with KSE-100 index fell by 1500 points.
The decline comes amid New Delhi’s aggressive diplomatic measures announced in response to a deadly terror attack in Pahalgam, Indian-occupied Kashmir, where 26 tourists were killed and several others injured.
Experts said market opened lower as investors braced for potential fallout. Escalating tensions between nuclear armed nations weighed heavily on sentiment, as strong earnings from key companies offered partial relief.
The direction of market will be manevured by state of Pak-India relations, and the central bank’s upcoming monetary policy decision in early May. Macroeconomic positives, including record-low inflation, a current account surplus, and a stable real effective exchange rate earlier pushed the market.
International Monetary Fund (IMF) and World Bank lately downgraded Pakistan’s growth forecast for the current fiscal year. It also projected inflation to rise to 7.7% by the end of the next fiscal cycle. In addition, Fitch Ratings warned of further depreciation of the Pakistani rupee, predicting it could fall to Rs285 per US dollar by June and potentially slide to Rs295 by the end of the fiscal year. However, local analysts expect a slightly less severe outcome, forecasting Rs283.
