The whole world is horrified after the air attacks by Israel and America on Iran. The dreadful effect of this tension was seen in the stock markets around the world on Monday. The Sensex in India fell by about 2%. But there was chaos in the stock market of Pakistan. There was such an earthquake in the Karachi Stock Exchange that billions of rupees of investors were lost in a moment. The situation became so out of control that trading had to be stopped for an hour due to extreme panic.
‘Black Monday’ in stock market
Monday morning proved to be a ‘Black Monday’ for the Pakistani stock market. Karachi Stock Exchange’s main index KSE-30 plunged by almost 9.8 percent in early trade itself. This is the biggest single day fall in the history of Pakistan’s stock market. The selling pressure was so severe that trading had to be halted for an hour. When trading resumed after an hour, the fall slowed down to 7.3 percent.
If we look at the data, in the last session the market had closed at 168,062.17 points, which fell to 152,916.77 points on Monday morning. However, by 11:30 am IST, it was trading at 157,690.93 points with a slight recovery, which was a huge loss of 6.17 percent (10,371 points). This severe fall has pushed the Pakistani market into a ‘bear market’ (recession phase), as it has now fallen by more than 20 percent from its highest level in January. The spectacular 50 percent jump that the market had made last year due to the stable government and increased investment, now seems to be turning into dust.
Two-way war increased investors’ heartbeats
There are not only international reasons behind this economic devastation, but Pakistan’s internal situation and border disputes are also responsible. Following the American and Israeli attacks on Iran over the weekend, supporters of Iran have taken to the streets in Pakistan. On Sunday, around 30 people lost their lives in a violent clash between protesters and police at the gate of the US Consulate in Karachi.
With this, Pakistan’s relations with Afghanistan have reached a very dangerous point. Pakistan has declared “open war” with Afghanistan. Deadly cross-border attacks are taking place from both sides, the echo of which is reaching the Afghan capital Kabul. Hundreds of people are reported to have died in these attacks so far. When the borders of a country are burning in the fire of war and violence is raging inside, then it is certain that investors will flee from there and the market will fall.
Stock markets around the world are burning in the fire of crude oil.
The impact of this war is not limited to Pakistan only. Due to this sound of war, the prices of crude oil have started rising rapidly at the international level, which is directly impacting the economy of the entire world including India. The impact of this fear was clearly visible in the Indian stock market on Monday. BSE Sensex fell by around 6,800 points in the pre-opening session and ultimately opened with a huge fall of 2,700 points.
There was also a red mark of recession in major Asian markets like Japan and South Korea. Even the American futures market fell by about one percent on Sunday.