Karachi Stock Exchange (KSE-100)

Why in News: Indian stocks showed resilience and turned positive while the Karachi Stock Exchange (KSE-100) recorded a steep 6% decline in early trade following overnight Indian strikes in Pakistan and Pakistan-occupied Jammu and Kashmir (PoJK). The strikes were in response to the Pahalgam terror attack, which claimed 26 lives, highlighting geopolitical tensions in the region.

Impact of the Event:

1. On Indian Markets:

   • Positive sentiment reflects market confidence in India’s decisive actions and its economic stability despite geopolitical challenges.

   • Defense and strategic sectors may see increased investor interest due to heightened national security measures.

2. On Pakistan Markets:

   • Significant drop in the Karachi Stock Exchange indicates investor panic and reduced confidence amidst escalating tensions.

   • Potential outflows of foreign investments due to geopolitical uncertainty.

3. Global Markets:

   • Emerging market indices may face short-term volatility as regional tensions could ripple across international investment trends.

   • Risk-averse investors might shift towards safer assets like gold or U.S. Treasuries.

Other Major Stock Indices:

1. Sensex (India):

   • Reflecting stability and investor confidence despite regional tensions.

   • Likely to gain in defense, IT, and FMCG sectors.

2. KSE-100 (Pakistan):

   • Significant losses point to political instability and economic vulnerability.

   • Banking and energy sectors are expected to be most affected.

3. Dow Jones Industrial Average (U.S.):

   • Potentially neutral with focus on domestic economic indicators.

4. FTSE 100 (UK):

   • Limited direct impact but may experience mild fluctuations depending on global risk sentiment.

5. Nikkei 225 (Japan):

   • Regional spillover effects could influence investor risk sentiment, though impact may be minimal.