Pakistani stock markets crash as India destroys air defence system in Lahore

Stock markets in Pakistan plunged sharply on Thursday after the country claimed the presence of Indian drones in major cities, while Indian bourses remained resilient before slipping into the red later in the day amid rising tensions.

The benchmark KSE-100 index in Pakistan tumbled over 6% to 103,060 points, before the trading was halted, as investors reacted nervously to Islamabad's assertion that Indian drones had entered airspace over Karachi and Lahore, the nation’s two largest cities.

Trading resumed with Fatima Bucha of AKD Securities confirming the situation on the floor had calmed down a bit.

“But the situation could get worse as investors are panicking due to the geopolitical situation,” she said. “No one is sure what is going to happen and how and if Pakistan will respond to India's aggression.”

Pakistani military spokesperson Maj Gen Ahmed Sharif Chaudhry claimed that 12 Indian drones had been shot down following Indian strikes a day earlier on what New Delhi termed as terrorist hideouts in Pakistan and Pakistan-Occupied Kashmir (PoK).

Chaudhry also claimed that India had used Israeli-made Harop drones, with debris being recovered from multiple locations.

"Indian drones continue to be sent into Pakistan airspace...(India) will continue to pay dearly for this naked aggression," Reuters quoted Chaudhry as saying.

India's defence ministry later confirmed that the armed forces not only foiled attempts by the Pakistani military to engage a number of military targets in Northern and Western India, they also destroyed a Pakistani air defence system in Lahore.

"Today morning Indian armed forces targeted air defence radars and systems at a number of locations in Pakistan. Indian response has been in the same domain with the same intensity as Pakistan," the ministry said in a readout.

"It has been reliably learnt that an air defence system at Lahore has been neutralised," it said.

Indian stock markets, on the other hand, held their ground despite volatility.

The 30-share BSE benchmark gauge climbed 181.21 points to 80,927.99 in early trade. The NSE Nifty went up by 32.85 points to 24,447.25.

However, later both the benchmark indices faced volatile trends and were trading in the red.

Sensex dropped to 80,624 at the time of writing this, while Nifty was at 24,335.

The developments came amid heightened tensions between the nuclear-armed neighbours following the Pahalgam terror attack on April 22 that killed 25 tourists and a local guide.

On Thursday, the government briefed an all-party meeting on the status and impact of ‘Operation Sindoor’, the military operation targeting terror camps in Pakistan.

Defence Minister Rajnath Singh, along with Home Minister Amit Shah, External Affairs Minister S Jaishankar, BJP president J P Nadda and Finance Minister Nirmala Sitharaman, represented the government. The opposition was represented by Congress president Mallikarjun Kharge, Rahul Gandhi, Trinamool Congress’ Sudip Bandyopadhyay, and DMK's T R Baalu, among others.

The opposition expressed support for the armed forces and urged unity.

This was the second such high-level briefing in a fortnight as India braces for possible fallout and further escalation across the border.