Pakistan Stock Exchange tanks over 3,000 points as border tensions with Afghanistan escalate

Investor nerves rattled on Friday as the Pakistan Stock Exchange (PSX) opened sharply lower, with its benchmark KSE-100 Index plunging more than 3,000 points amid escalating military tensions along the Pakistan-Afghanistan border.

At 9:20 am, the KSE-100 Index stood at 165,813.86, down 3,079.22 points or 1.82 per cent from the previous close, reflecting widespread selling across sectors.

The sharp decline came within minutes of the opening bell, underscoring heightened geopolitical risk aversion among investors.

Broad-based selling across key sectors

Losses were seen across major segments of the market, including automobile assemblers, cement, commercial banks, fertiliser, oil and gas exploration companies, oil marketing companies (OMCs), power generation firms and refineries.

Heavyweight stocks such as Attock Refinery Limited (ARL), Mari Energies (MARI), Oil and Gas Development Company (OGDC), Pakistan Oilfields Limited (POL), Pakistan Petroleum Limited (PPL), Sui Southern Gas Company (SSGC), Sui Northern Gas Pipelines Limited (SNGPL), MCB Bank (MCB), Meezan Bank (MEBL) and National Bank of Pakistan (NBP) were trading in negative territory, dragging the broader index lower.

Market participants said the sell-off reflected fears of prolonged instability and potential economic disruption if hostilities intensify.

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Escalation along Durand line

The market slump coincided with a major escalation along the disputed Durand Line, the porous frontier separating Pakistan and Afghanistan. Both sides have reported heavy fighting, including cross-border airstrikes, artillery shelling and ground assaults across multiple sectors.

The confrontation is one of the most intense episodes of military engagement between the two neighbours in recent years.

In a post on X, Pakistan’s Information Minister Attaullah Tarar said strikes were conducted in Kabul, Paktia and Kandahar, claiming that 27 posts were destroyed and nine seized.

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According to Pakistani authorities, Pakistan Air Force jets carried out strikes deep inside Afghanistan, targeting locations in Kabul, Kandahar, Nangarhar and Paktia. Officials claimed the operations destroyed ammunition depots and multiple Afghan military installations.

Pakistan further asserted that its forces eliminated 133 Afghan Taliban and Tehreek-e-Taliban Pakistan (TTP) fighters during overnight clashes.

Geopolitical risk clouds investor outlook

While Afghan authorities have issued sharply conflicting claims regarding casualties and territorial control, the intensifying hostilities have raised concerns about regional stability, trade flows and fiscal pressures.

Pakistan’s already fragile macroeconomic environment — marked by external financing constraints and inflationary pressures — could face additional strain if the conflict prolongs or widens.