Pakistan's stock market felt jitters on Thursday, a day after India hardened its approach against the western neighbour by announcing the suspension of Indus Water Treaty and prohibiting the issuance of visa for Pakistani nationals.
At the Karachi-based Pakistan Stock Exchange, the benchmark index KSE-100 slumped to as low as 2.12%, or 2,485.85 points, earlier in the day. By 3:30 pm (local time), it recovered marginally to trade 1.89% lower at 115,014.
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KSE-100, notably, was among the top performing equity market indices in 2024. Propelled by low-valuations and attractive price-to-earnings ratio, the index had rallied around 80% during the last calendar year.
The intraday decline in the Pakistan stock market comes after India announced a slew of measures that further downgrades the already-strained ties between the two neighbours. This came following the alleged cross-border links of the terrorists who targeted tourists in Pahalgam, one of the hotspots for tourists in South Kashmir.
The attack claimed the lives of 26 tourists, including two foreign nationals.
Apart from putting the Indus treaty into abeyance and cancelling visas, India has also asked various Pakistani diplomats stationed in New Delhi to leave at the earliest. The country has also recalled several of its officials serving at the Indian High Commission in Islamabad.
The Attari-Wagah border in Punjab will be closed, the Ministry of External Affairs said.
The actions were announced on Wednesday night, following a meeting of the Cabinet Committee on Security chaired by Prime Minister Narendra Modi. The meeting was attended by Home Minister Amit Shah and Defence Minister Rajnath Singh, among other officials.
The Indian government has vowed to crackdown on the perpetrators of the gruesome attack, and also act against those who orchestrated it.
The responsibility for the fatal terror attack has been claimed by The Resistance Front, which, according to the South Asia Terrorism Portal, is an off-shoot of the Pakistan-based Lashkar-e-Taiba.
The Pakistani government, which also called a meeting of high-ranking officials on Thursday, has denied its involvement in the attack.
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