ISLAMABAD: Pakistan’s benchmark KSE-100 index fell on Friday amid escalating tensions with Afghanistan as Pakistan bombed government targets in Kabul and Kandahar where the Afghan Taliban leadership is based, triggering early selling pressure before the market recovered from sharp intraday losses.
The strikes marked a significant escalation in cross-border tensions between Islamabad and Kabul, raising concerns about potential retaliation and broader regional instability. The development comes at a time when relations between the two sides have been strained for months over security issues along the border and militant attacks in Pakistan that it blames on Afghan-based groups. Kabul denies it harbors such outfits.
Heightened geopolitical risk tends to weigh on investor sentiment, particularly in emerging markets, as uncertainty over security and diplomatic fallout can prompt risk-off positioning and capital outflows. Traders said investors reacted swiftly to the headlines, pricing in the possibility of further escalation.
“KSE 100 Index opened on a negative note and declined to make an intraday low of -3,081 points (down by -1.82 percent), this negativity can be accredited to regional tension with Afghanistan, where Pakistan targeted key military installation of Afghanistan Taliban regime in Kabul,” brokerage house Topline Securities said in its market review.
