KARACHI: Bloodbath continued on the Pakistan Stock Exchange (PSX) for the second straight day as the index suffered the largest-ever plunge, causing almost Rs820 billion loss to equity investors on Thursday after India launched drone attacks in major cities, including Karachi and Lahore.

The market capital had lost Rs1.3 trillion in value in three sessions as jittery investors preferred to exit the market amid growing uncertainty about the economic outlook as geopolitical tensions turned into a military standoff after India hit three cities with missiles in the wee hours of Wednesday, martyring over 31 innocent civilians. Pakistan’s armed forces responded with the downing of five Indian fighter planes.

Meanwhile, Indian shares fell on Thursday in their most volatile session this month. The Nifty 50 settled 0.58pc lower at 24,273.8 and the BSE Sensex fell 0.51pc to 80,334.81 after struggling for direction in early trade.

Topline Securities Ltd said the PSX faced an unprecedented meltdown on Thursday as the benchmark KSE-100 index plunged by 6,482.21 points, closing at 103,527.82 — marking the largest single-day decline in the index’s history in absolute terms.

Indian shares fall in most volatile session this month

Investor sentiment remained deeply shaken throughout the session, which saw extreme volatility. The KSE-100 recorded its highest-ever intraday movement of 10,282 points, swinging from an intraday high of 1,872 points to an intraday low of 8,410 points.

The market crash followed alarming geopolitical developments after ISPR Director General Lt Gen Ahmed Sharif Chaudhry announced that Pakistani forces had neutralised 25 drones sent by India since last night. He also confirmed that four army personnel were injured after one drone managed to partially strike a military target, despite the majority being intercepted.

The statement sent shockwaves through financial markets, triggering widespread panic selling amid fears of escalating cross-border hostilities. Investors rushed to offload positions, leading to a broad-based decline across sectors.

Amid the sharp sell-off, trading was temporarily halted for one hour after the KSE-30 index dropped more than 5pc for five consecutive minutes, activating the market’s circuit breaker mechanism.

The largest drag on the benchmark index came from Fauji Fertiliser, Mari Energies, United Bank, OGDC, and Pakistan Petroleum, which eroded 2,051 points from the benchmark index.

Ali Najib, Head of Sales at Insight Securities, said PSX commenced the session on a positive note as the index gained 1,872 points or 1.70pc. However, media reports about drone attacks dampened investors’ confidence regarding the current escalation is fizzling out.

Selling pressure diminished the previously strong momentum after ISPR’s con­­firmation. Conse­quen­tly, PSX went through with its historic bloodbath, and at 12:34 pm, trading was halted for an hour.

However, there was no sigh of relief after trading resumed at 13:34 pm as the benchmark index continued to receive selling pressure.

The market participation was strong as the trading volume rose 18.81pc to 653.55 million shares, and the traded value rose 17.65pc to Rs35.43 billion day-on-day. Ahsan Meha­n­­ti of Arif Habib Corpora­tion said stocks witnessed the largest decline amid security unrest, adding that the weak rupee, economic uncertainty, and falling Pakistan’s dollar bonds played a catalyst role in the record bearish close at PSX.

Published in Dawn, May 9th, 2025