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Pakistan stock market witnessed a sharp decline on Wednesday, May 7, as investors reacted to India’s overnight air strikes
Pakistan stock market crash: Karachi stock exchange crashes 6% after India’s Operation Sindoor
Pakistan Stock Market Crash: The Pakistan stock market witnessed a sharp decline on Wednesday, May 7, as investors reacted to India’s overnight air strikes on nine terror-linked locations in Pakistan and Pakistan-occupied Kashmir under ‘Operation Sindoor’.
The benchmark Karachi-100 index nosedived by 6,272 points, or nearly 6 per cent, in early trade, dropping to a low of 107,296.64 from the previous close of 113,568.51.
Since the deadly terror attack in Pahalgam, the KSE-100 index has fallen by 3.7 per cent, in contrast to India’s Sensex, which has gained around 1.5 per cent during the same period.
The KSE-100 index of the Pakistan Stock Exchange has dropped nearly 4% since the terrorist attack in Jammu & Kashmir on April 22, 2025, as rising tensions between India and Pakistan weigh heavily on investor sentiment. Between April 23 and May 5, the benchmark KSE-100 index declined by 3.7%, reflecting fears of a potential military escalation between the two nations.
Indian Markets Today: Sensex, Nifty Turn Volatile
Despite heightened geopolitical tensions, Indian stock markets have shown resilience. The Sensex initially slumped 692 points to 79,948.80 from its previous close of 80,641.07 but swiftly recovered, climbing over 200 points to touch 80,845.
Volatility persisted through the morning. By around 10 AM, the Sensex was down just 32 points, or 0.04%, at 80,609, while the Nifty 50 slipped 19 points, or 0.08%, to 24,361.
“Geopolitical tensions like the current Indo-Pak standoff under Operation Sindoor tend to trigger short-term volatility. We’ve seen the Nifty and Sensex fall 0.6–0.8% recently. However, history shows markets bounce back strongly. After the Kargil War, the Sensex rose 63% within a year. It gained over 20% after the Parliament attack, 60% post-Mumbai attacks, and 15% following the Balakot airstrikes,” said Pankaj Singh, smallcase manager and Founder of SmartWealth.ai. “While caution in the short term is understandable, Indian markets have a record of resilience once uncertainty clears. Unless compounded by broader economic or global shocks, Indo-Pak tensions have not caused lasting damage. Investors should stay focused on fundamentals, not fear,” he added.
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