Geopolitical Tensions Drag KSE-100 Down 900 Points

Key Sectors Hit Hard as Investor Anxiety Deepens

By DTD- On May 5, 2025

Karachi – The Pakistan Stock Exchange (PSX) opened the week under significant selling pressure, as rising geopolitical tensions between Pakistan and India rattled investor confidence, dragging the benchmark KSE-100 Index down by nearly 900 points in early trading.

As of 9:40am, the KSE-100 was recorded at 113,223.46, marking a steep decline of 890.47 points, or 0.78%, extending the bearish trend from the previous week when the index had lost over 1,350 points.

The latest selloff was driven by escalating uncertainty after media reports suggested possible Indian airstrikes. These reports followed a high-level meeting between Indian Prime Minister Narendra Modi and Air Chief Marshal VR Chaudhari, in the wake of a deadly militant attack in Pahalgam, Jammu and Kashmir.

Investor anxiety reflected across key sectors, with significant losses in heavyweight scrips including Hub Power Company (HUBCO), Pakistan State Oil (PSO), Sui Northern Gas Pipelines Ltd (SNGPL), Mari Petroleum (MARI), Oil and Gas Development Company (OGDC), Pakistan Petroleum Ltd (PPL), Meezan Bank Ltd (MEBL), National Bank of Pakistan (NBP), and United Bank Ltd (UBL).

Market participants also remained cautious ahead of the State Bank of Pakistan’s Monetary Policy Committee (MPC) meeting scheduled for later today. Analysts expect the central bank to make a key decision on interest rates amid ongoing macroeconomic and political challenges.

“The market is reacting to both geopolitical concerns and policy uncertainty,” said a trader at a Karachi-based brokerage. “Until there is more clarity on the regional security outlook and interest rate direction, investors will likely stay on the sidelines.”

In contrast, Indian equity markets maintained their upward momentum. The Nifty 50 climbed 0.59% to 24,487.14, and the BSE Sensex rose 0.54% to 80,936.4 by 10:03am IST, buoyed by easing global trade tensions, sustained foreign inflows, and declining crude oil prices.

Indian markets are currently riding their longest weekly winning streak of the year, underpinned by strong foreign investor confidence, although analysts caution that earnings headwinds and regional instability may temper further gains.

The divergence between the two neighboring markets highlights the fragility of investor sentiment amid geopolitical uncertainty, with Pakistan’s market particularly vulnerable to regional shocks.