Pakistan’s stock market traded sharply lower on Friday amid heightened volatility as tensions escalated due to ongoing cross-border clashes with Afghanistan. The benchmark Karachi 100 Index on the Karachi Stock Exchange declined more than 2%, tracking the broader sell-off across Asian markets amid the continuing US-Iran war in the Middle East.
The Karachi 100 Index fell as much as 2.56%, or 4,138 points, to an intraday low of 157,072.
Among the major laggards on the index, Javedan Corp was the top loser, plunging nearly 10%. Other stocks including International Industries, Unity Foods, Interloop, Fauji Cement Company, Systems Ltd, Nishat Mills, and International Steels also declined by up to 6%.
The decline in Pakistan’s stock market comes after the United States ordered non-emergency staff and their family members at its consulates in Lahore and Karachi to leave Pakistan, citing potential security risks and the threat of terrorist attacks following violent protests triggered by the killing of Iran’s top leader.
“Violent extremist groups have carried out attacks in Pakistan,” the US Embassy in Islamabad said in a travel advisory. The embassy added that there was “no change of status” for personnel stationed in the capital, according to a report by Bloomberg.
At least 24 people were killed in protests across major Pakistani cities on Sunday after coordinated US and Israeli strikes killed Iran’s Supreme Leader Ayatollah Ali Khamenei, according to local authorities.
In Karachi, the people were killed by US security officials. Protesters tried to storm the US consulate in Karachi and staged demonstrations in Lahore and Islamabad.
Pakistan-Afghanistan War
The deteriorating security situation comes as Pakistan is also engaged in escalating military tensions with Afghanistan and grappling with the impact of the US-Iran war in the Middle East on energy supplies.
The two countries have been exchanging attacks for more than a week after Afghanistan’s Taliban-led government launched retaliatory strikes following Pakistani air raids on militant targets. Islamabad subsequently declared what it described as an “open war” with Afghanistan and expanded its strikes deeper into Afghan territory, including targets in the capital Kabul.
Meanwhile, Pakistan Prime Minister Shehbaz Sharif said Islamabad would not initiate talks to end the hostilities unless Kabul stops supporting and harboring militant groups responsible for cross-border attacks, Bloomberg reported.
Separately, a International Monetary Fund (IMF) mission visiting Pakistan to review the country’s loan programme reportedly left for Turkey abruptly, according to local media reports, although discussions are continuing virtually.
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