KARACHI: The Pakistan Stock Exchange (PSX) fell sharply on Monday as cross-border tensions between Pakistan and Afghanistan prompted broad-based selling across key sectors, traders and analysts said.
The benchmark KSE-100 index fell by 4,654.77 points, or 2.85 percent, to close at 158,443.42 points, compared to the weekend close of 163,098.19 points.
Muhammad Waqas Ghani, head of research at JS Global Capital Ltd, said the decline comes amid escalating tensions with Afghanistan after three-week bull run.
“The heightened geopolitical uncertainty has triggered broad-based selling across key sectors, including banking, energy and cement, as investors remain cautious,” he told Arab News.
Pakistan and Afghanistan exchanged cross-border fire over the weekend, leaving 23 Pakistani soldiers and more than 200 Afghan Taliban fighters dead, while several Afghan border posts were destroyed, according to the Pakistani military.
The skirmishes have plunged the already strained relations between the two sides to a new low.
Meanwhile, Ahsan Mehanti, chief executive officer of Arif Habib Commodities, said apart from the security situation, stocks also fell due to uncertainty surrounding Pakistan’s talks with the International Monetary Fund (IMF) for its $8.4 billion loan reviews.
“Uncertainty over outcome of the finance minister’s crucial meeting with the IMF and World Bank to secure the next IMF tranche and contest major adjustments IMF proposed for the external account played a catalyst role in selling activity at PSX,” he said.
Finance Minister Muhammad Aurangzeb arrived in Washington on Sunday to attend the annual meetings of the IMF and the World Bank, where he will hold a series of high-level talks on investment, taxation and economic reforms, his ministry said.
The visit comes as Pakistan engages with the International Monetary Fund to unlock the next tranche of its $7 billion loan program approved in September 2024, aimed at supporting economic stabilization and structural reforms, and a $1.4 billion Resilience and Sustainability Facility secured in May.
