Pahalgam attack: Karachi-100 index crashes 2,565 pts as tensions mount

Pahalgam terror attack news: Pakistan's premier stock index in Karachi was trading 2.2 per cent lower on Thursday. In comparison, the Sensex, Nifty were volatile as geopolitical tensions escalate

Pahalgam terror attack news today: India's strong diplomatic response against Pahalgam terror attack, directed towards Pakistan, has sent shockwaves across the country's stock market. Pakistan's benchmark index, Karachi Stock Exchange (Karachi 100), plunged as much as 2,565 points or 2.2 per cent in the morning trade on Thursday, April 24, after India announced five major steps against Islamabad, including the suspension of the Indus Waters Treaty, 1960.

 

The Karachi Stock Exchange, however, recouped some of the losses and was at 116,228.25, down 997.89 points or 0.85 per cent at 12:20 PM IST, as against Wednesday's closing level of 1,17,226.

 

 

KSE-100 hit a 52-week low of 70,562.12 and a 52-week high of 120,796.67.

 

Back home, the Indian stock markets are volatile with a negative bias. The BSE Sensex index is down 259 points (0.3 per cent), while the Nifty50 is lower by 64 points (0.26 per cent).

 

Why is Karachi Stock Exchange down today? India's response to Pahalgam attack

The Karachi Stock Exchange crashed heavily on Thursday after India announced five major steps in response to the Pahalgam terror attack that killed at least 26 tourists on April 22, 2025.

 

In a major diplomatic blow to Pakistan, India's Ministry of External Affairs (MEA), on Wednesday night, said that the Indus Waters Treaty — a key water-sharing agreement between India and Pakistan - stands in 'abeyance' until Pakistan acts decisively against cross-border terrorism.

 

The suspension of the Indus Waters Treaty, a first in Indo-Pak history, will hit the Pakistani economy which relies significantly on the Indus River System for its agricultural needs. Besides, cities like Karachi, Lahore, and Multan depend on Indus waters for drinking and municipal uses. READ MORE

 

That apart, the Cabinet Committee on Security (CCS) also announced that it will shut down the Attari border for all movement, asking Indians across the border to return to India by May 1.

 

Additionally, the MEA also cancelled all the existing visas issued under the SAARC Visa Exemption Scheme (SVES) for Pakistani nationals, asking Pakistani citizens to leave India within 48 hours.

 

In another sign of a breakdown in the bilateral relations between India and Pakistan, the Indian government declared Pakistani defence, navy, and air force advisers as 'persona non grata' and ordered them to leave.

 

Pakistan's economic crisis: IMF lowers GDP outlook

Pakistani investors were also left looking for cover as India's blow to Islamabad came a day after the International Monetary Fund (IMF) cut the gross domestic product (GDP) growth projection from 3 per cent to 2.6 per cent for fiscal year 2024-2025.

 

That apart, the Asian Development Bank (ADB), too, has lowered Pakistan's 2025 GDP growth forecast to 2.5 per cent, from 3 per cent projected in December 2024.

 

Both these projections fall short of the 3.6-per cent growth target set by the Pakistani government for the said financial year. 

Pahalgam Attack, Indus Waters Treaty suspension Impact on Sensex, Nifty

According to analysts, India's steps against Pakistan have induced volatility in the Indian stock markets with sectors sensitive to geopolitical risks, such as energy and infrastructure, witnessing higher choppiness.  "Heightened tensions have led to risk aversion among investors, prompting a profit booking in equities. Further actions by either nation could exacerbate tensions, impacting market stability," said Narender Singh, smallcase manager and Founder at Growth Investing.  He added that the government's measures to mitigate any economic fallout will be crucial in restoring investor confidence. International diplomatic responses, he said, may influence the trajectory of the conflict and, by extension, market dynamics.

 

Investors are advised to monitor the situation closely, as prolonged geopolitical tensions could have lasting effects on market performance."

  Pahalgam terror attack news

On April 22, 2025, terrorists, allegedly linked to The Resistance Front (TRF), a militant outfit seen as a proxy for the Pakistan-based Lashkar-e-Taiba, opened fire at tourists in the meadow of Baisaran, near Pahalgam in Kashmir.

 

The terror attack killed 26, all men, in one of the deadliest terror attacks in the Kashmir Valley since the Pulwama incident in 2019.

 

Following the attack, Prime Minister Narendra Modi is expected to hold an all-party meeting today.

 

Separately, Pakistan is expected to hold a meeting with its top political and military leaders in response to India's move to suspend the Indus Water Treaty and downgrade diplomatic ties.