A recovery on Pakistan’s Karachi-100 index proved short-lived on Friday, as the index slipped into the red after rising nearly 1,700 points. KSE100 has now taken its losing-run to the fifth straight session, as tensions with India, along with macro-economic concerns, come to haunt Pakistani investors. During the five-day period, the 100-pack index has entered the correction mode, falling 10 per cent.
At 11 am IST, the 100-pack index was trading at 1,02,635.25, down 38 points or 0.04 per cent. In India, the BSE Sensex fell 811.25 points, or 1.01 per cent, to 79,515.81. Nifty was trading at 24,014.50, down 259.30 points or 1.07 per cent. This was in addition to the fag-end selling seen on both the indices on Wednesday.
Investors in Pakistan turned jittery after the Pakistani benchmark index tumbled 5.89 per cent the previous day amid reports of Indian Armed Forces targeted Air Defence Radars and systems at a number of locations in Pakistan.
The Economic Affairs Division of the Pakistan government has reportedly asked for a bigger dole from its international partners, citing heavy losses following the retaliation by Indian forces. This comes ahead of Pakistan’s meeting with the International Monetary Fund today that will review the extended funding facility to Islamabad.
Moody’s in a recent note said persistent increase in tensions with India could also impair Pakistan’s access to external financing and pressure its foreign-exchange reserves, which remain well below what is required to meet its external debt payment needs for the next few years.
“Sustained escalation in tensions with India would likely weigh on Pakistan’s growth and hamper the government’s ongoing fiscal consolidation, setting back Pakistan’s progress in achieving macroeconomic stability,” Moody’s said.
Pakistan’s benchmark stock index Karachi-100 index has shaved nearly 15,800 points off its value ever since Pakistan-sponsored terrorists killed 26 tourists in Kashmir’s Pahalgam on April 22. The 100-pack index has fallen 13.33 per cent, as investors there fret over retaliation from India in days to come.
On May 7, India launched Operation Sindoor on nine terror targets in Pakistan and Pakistan-occupied Kashmir. On May 8, loud explosions were heard in Karachi and Lahore, which led KS100 tumbling. There were reports that Indian Armed Forces targeted Air Defence Radars and systems at a number of locations in Pakistan.
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