Operation Sindoor spooks Pakistan stock market! Trading on KSE 100 halted as index plunges over 6%

Operation Sindoor has spooked the Pakistan stock market! A day after India launched missile strikes on terrorist facilities in Pakistan and Pakistan occupied Kashmir, the Pakistan stock market index KSE 100 crashed over 6%, resulting in trading coming to a halt. This comes after the Pakistan stock market had plunged over 3% yesterday as well.Pakistan stock market has been bleeding since the Pahalgam terror attack on April 22. The economic measures taken by India, including the suspension of the Indus Waters Treaty and restrictions on imports, vessels and postal deliveries, have unsettled investors in Pakistani financial markets. The situation was further intensified by Operation Sindoor, conducted by Indian military forces on May 7, which struck nine terrorist installations across Pakistan and Pakistan occupied KashmirIn contrast, the Indian stock markets have demonstrated remarkable resilience, showing strong positive momentum.The Pakistani stock market historically demonstrates increased volatility during heightened India-Pakistan tensions, highlighting economic fragilities beyond direct conflict effects. The thin trading volumes enable rapid foreign investor exits when perceived risks rise.Also Read | India soars, Pak crashes! Indian stock markets rally, Pakistan’s KSE 100 plunges amid India-Pakistan tensionsPakistan's economic condition remains precarious, heavily dependent on International Monetary Fund support packages. Recent signs of economic recovery face potential reversal amidst rising tensions with India.The nation faces several economic hurdles, including declining growth rates, rupee depreciation, and potential credit downgrades without continuous IMF support. Despite low stock valuations, the market experiences continuous foreign capital outflows and limited participation from institutional investors.According to Moody's assessment, the escalating bilateral tensions would have a more severe impact on Pakistan's economy compared to India's.