After India carried out Operation Sindoor on May 7, targeting 9 terrorist camps across Pakistan and Pakistan-occupied Kashmir, Pakistan’s stock market saw a sharp fall. The KSE-100 index crashed by over 6%, leading to a halt in trading. This came just a day after a 3% drop, triggered by growing tensions following the Pahalgam terror attack on April 22.
While Pakistan’s financial markets continue to bleed, Indian stock markets are showing resilience. Despite the military operation and rising tensions, Indian markets have held strong, with investors showing confidence in the country’s economy and stability.
India’s response to the terror attack has gone beyond military action. It has also taken economic steps like halting the Indus Waters Treaty, blocking imports, and stopping postal services to Pakistan. These moves have added pressure to an already weak Pakistani economy.
Pakistan’s economy is already in trouble. It depends heavily on IMF support and faces many problems, including slow growth, a falling rupee, and the risk of credit downgrades. Foreign investors are pulling money out of the country’s markets, and there is little support from big local institutions.
The Pakistan stock market is known to be sensitive to India-Pakistan tensions. When such tensions rise, foreign investors tend to leave quickly, especially since trading volumes are low. This adds to the instability, making the market even more fragile.
Operation Sindoor has shaken investor confidence in Pakistan, causing a major stock market crash. With growing economic stress, little investor support, and the threat of conflict, Pakistan’s economy is in a risky spot. In contrast, India has shown both military and market strength, reflecting its stable position in the region.
Read more on: IndiGo Shares in Focus as Over 165 Flights Cancelled Until May 10 Following Operation Sindoor
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Published on: May 8, 2025, 3:21 PM IST
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