Pakistan’s main stock market index, KSE-30, fell 9.6% as the market opened on Monday, March 2. This decline was due to increased tension in the Middle East after the US and Israel attacks on Iran. The situation became so serious that trading in the market had to be stopped for 45 minutes. The increasing tension with Afghanistan also put extra pressure on the Pakistani stock market.
During intraday trading, the KSE-30 index fell nearly 5,000 points, or 9.6%, to the day’s low of 46,351.64. According to a Reuters report, this is the biggest fall in the history of Pakistani stock market. Even after trading resumed, the index was trading 9.25% lower. However, despite today’s decline, the Pakistani stock market is still up about 32% this year.
Why did Pakistani stock market fall?
The huge fall in Pakistan’s stock market is mainly due to the Middle East dispute and tension on the border with Afghanistan. Pro-Iran protests have also been seen across the country. According to media reports, at least 10 people were killed in clashes with police when protesters tried to enter the gate of the US Consulate in Karachi on Sunday. Bilal Khan, head of international equity sales at Karachi-based brokerage Arif Habib, told Reuters. “Rising tensions in the Middle East and pro-Iran protests across the country have had a very bad impact on the market.”
“Open war” with Afghanistan
The situation between Pakistan and Afghanistan has worsened. Both countries have carried out cross-border attacks that have reached the Afghan capital and have reportedly killed hundreds of people. Pakistan on Thursday night launched Operation Ghazab Lil Haq in response to attacks by the Afghan Taliban at 53 places along the 2,600 km border. Pakistan also targeted military bases inside the country with air strikes.
Global market also declined
A lot of decline is being seen in the global market today. Asian stock markets are down about 1.3%. US equity index futures are down 0.6%. Stock markets in India also closed with huge losses. BSE Sensex closed down 1048 points. NSE Nifty closed down 312 points. European stock markets are also falling. EUR STOXX 50 futures are down 1.3%. DAX futures are down 1.4%. FTSE futures are down 0.6%.