FX.co ★ Pakistan Stocks Crash on Escalating Strikes

The Pakistan Stock Exchange's benchmark index, the KSE 100, faced a significant downturn, nearing the 103,000 mark on Thursday before trading was suspended amid escalating tensions between Pakistan and India, raising concerns of a potential conflict. This downturn reflects a 16% decline from the record high of 120,000 achieved last month. The situation intensified following reports of explosions in Lahore a day after India conducted air strikes within Pakistani territory, which New Delhi alleged targeted terrorist infrastructure. In response, Pakistan vowed retaliation, exacerbating fears of an ongoing conflict. This escalation occurred despite signs that Pakistan's economy was on a gradual path to recovery from its recent crisis, with the government striving to stabilize finances and make headway on the $7 billion loan secured from the IMF last year. Nevertheless, stocks in several sectors showed resilience, bouncing back ahead of the IMF's impending decision regarding a potential extension of the country's debt repayment timeline.