Indian & Pakistani stocks turn red on escalation of cross-border hostilities

Stock markets in Karachi and Mumbai got spooked on Wednesday by the latest military conflict between nuclear powers India and Pakistan along the Line of Control in disputed Kashmir.

India’s stock market index Sensex slid 189.54 points on Wednesday to 35,784.17, while the Nifty 50 (the National Stock Exchange of India’s benchmark broad based stock market index) dropped 68.10 points to 10,767.20. The rupee was also trading lower, at 71.47 per dollar.

Pakistani markets have also extended their losses. The benchmark Karachi Stock Exchange (KSE100 Index) was trading 1,476 points lower at 37,345, down three percent. It’s the index’s biggest fall since July 11, 2017.

“Indian markets are in range-bound position till the 50-stock Nifty trades in between 10,500 to 10,950 levels. Bull or bear run into the Indian markets would become clear as and when the Nifty breaks either sides of the range,” Simi Bhaumik, a SEBI registered technical equity analyst, told Zee Business Online.

According to the managing director of Equinomics Research, G Chokkalingam, “War will be a difficult option with both countries sitting on nuclear weapons. There can be escalation of conflict, but it is unlikely to turn into a full-fledged war,” he told the Economic Times.

“Logically it should die down in some time,” he said, adding: “There could be other risks to the market, but a risk of war is improbable.”

Tensions between India and Pakistan have escalated dramatically following a suicide car bomb attack in Indian-held Kashmir this month which killed 44 Indian paramilitary police officers. The suicide attack on a large convoy of the Central Reserve Police Force (CRPF) was the deadliest attack on security forces in the disputed region since the 1989 insurgency began.

Responsibility for the attack was claimed by Jaish-e-Mohammed (JeM), an organization with ties to the Taliban and Al-Qaeda.

In response, India began airstrikes against the terrorist group, accusing Pakistan of failing to crack down on terrorist activity in the area.

READ MORE: 1st VIDEO of captured and injured Indian pilot released by Radio Pakistan

On Wednesday, the Pakistani Army said it shot down two Indian Air Force aircraft after they crossed into its airspace. One aircraft fell on the Pakistani-controlled area, and a pilot was arrested on the ground. Pakistan has closed its airspace for Indian flights.

Indian Air Force jets intercepted Pakistani military jets after they crossed into Indian airspace over disputed Kashmir. Karachi said its jets didn’t cross the border and avoided “human loss.”

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