The Pakistan stock market witnessed a sharp rebound on May 9, 2025, after suffering significant losses over four consecutive sessions due to rising India-Pakistan tensions. The KSE-100 index, operated by the Pakistan Stock Exchange (PSX), regained investor confidence with an early 2% jump, signaling cautious optimism amid geopolitical uncertainties.
The Pakistan Stock Exchange (PSX), headquartered in Karachi, experienced a recovery on Friday, May 9, after enduring a sharp four-day sell-off triggered by escalating tensions with neighboring India.
The benchmark KSE-100 index rose as much as 2% in early trade and was up 0.83% or 857 points at 103,531 at the time of reporting, according to Bloomberg. This uptick comes as a welcome relief following a 9.5% decline over the previous four sessions, including a 6% plunge on May 8, which led to a temporary trading halt.
The downturn was driven by heightened geopolitical tensions after Indian military forces responded to a terror attack in Pahalgam, Kashmir, that left 26 civilians dead. India carried out targeted strikes on nine locations in Pakistan and Pakistan-occupied Kashmir on May 7. Despite India describing the operations as “precise and non-escalatory,” tensions escalated further when Pakistani drones and missiles attempted to strike military installations in Jammu and Pathankot on the night of May 8, prompting swift Indian defense action.
The stock market’s rebound reflects investor recalibration as immediate fears of broader conflict appear to ease. However, market analysts warn of continued volatility as regional developments unfold.
The PSX, which oversees stock market operations in Pakistan, remains vigilant amid the evolving situation, emphasizing the importance of maintaining market stability and investor confidence.
