Karachi: Pakistan’s stocks dropped for a sixth straight day after the government suspended bilateral trade with India in a deepening spat over the disputed Kashmir region.
The benchmark KSE-100 Index of shares fell 2.2% as of 11:17 a.m. local time on Wednesday, sliding to a new four-year low.
“People are selling whatever they can,” said Bilal Khan, head of international sales at Arif Habib Ltd. in Karachi. “The risk of escalation has further dented already weak investor sentiment. Value buyers will continue to hold off given the heightened tensions.”
The souring relations between the two nuclear-armed nations add to a backdrop of worries that have made Pakistan’s stocks the world’s worst performers this year, falling more than 20%. The move to suspend trade followed India’s decision to revoke seven decades of autonomy for Kashmir, the disputed Muslim-majority region that straddles the two countries.
“There is fear that India, given the level of military presence now in Indian-occupied Kashmir, will try some misadventure at the border which could escalate pretty fast,” said Ovais Ahsan, chief executive officer at Optimus Capital Management Pvt. in Karachi. “It’s low probability for now, but it’s a dangerous flash point.”
Relations between the nations have been strained since February, when a suicide bombing in Kashmir killed 40 Indian paramilitary troops. There was an airspace violation by fighters jets crossing the border and exchange of strikes following that attack. – Bloomberg
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