Kumar Bahukhandi
Pakistan stock market in chaos due to the attack on Iran. (Photo: Reuters)
Pakistan Stock Market Crash: Global tensions have caused panic in the Pakistani stock market. Trading had to be temporarily halted after a sudden, significant drop. The Karachi 100 (KSE) index plummeted -9.68% in one fell swoop. Even the US and Israeli markets didn’t fall that far.
Iran has been devastated by Israeli and American attacks. The escalating tensions in the Middle East have caused widespread panic worldwide. Flights to the Middle East from many countries, including India, have been canceled. Meanwhile, the stock market is also being affected. Markets in the US, China, Japan, and India are clearly under pressure. However, this war has devastated Pakistan’s stock market in one fell swoop.
Indeed, on March 2, 2026, the Pakistan Stock Exchange recorded a massive decline. As soon as the market opened, there was tremendous selling pressure, and the index fell by nearly 10%. Despite numerous economic challenges, Pakistan’s stock market had not seen such a significant decline in recent times.
Pakistan’s market suddenly collapsed
The major benchmark KSE-100 Index plunged by nearly 10%, briefly panicking investors, forcing a temporary halt in trading. The Karachi 100 (KSE) index plummeted -9.68%, or 16,263.63 points, to 151,798.55.
Under regulations, circuit breakers are implemented when markets are highly volatile to prevent investors from panicking and selling. Trading was halted for about an hour and later resumed, but the sentiment remained subdued.
The ongoing conflict with Afghanistan
The main reason for this decline is the US and Israeli military attack on Iran. This war is expected to cause significant economic losses for Pakistan. Pakistan’s conflict with Afghanistan, along with the ongoing conflict with Afghanistan, presents a double blow to Pakistan Investors fear that further escalation of the conflict could severely impact oil supplies. Important sea routes like the Strait of Hormuz are particularly vulnerable.
This is why crude oil prices are also seeing a rise, which could increase pressure on import-dependent economies.
Meanwhile, experts say that emerging markets like Pakistan are more vulnerable to global tensions. Foreign investors withdraw money rapidly to avoid risk, which further accelerates the market decline. For Pakistan, which is already facing economic challenges and political uncertainty, this external shock could further weaken investor confidence.
