The Pakistan Stock Exchange (PSX) resumed trading on March 2, 2026, following a 12.3% plunge—the largest single-day drop in its history—triggered by violent protests near the US consulate in Karachi. The downturn intensified concerns over geopolitical instability and capital outflow risks in emerging markets.
- PSX recorded a 12.3% single-day drop—the largest in its history—on March 1, 2026
- KSE-100 index fell from 68,200 to 59,800 points before resuming trading
- Foreign investors pulled $230 million from Pakistani equities in two days
- XLE fell 4.1% amid elevated regional risk sentiment
- PFE shares declined 2.3% on broad market jitters
- CL=F rose 1.8% on increased risk premiums for supply disruptions
Trading resumed on the Pakistan Stock Exchange (PSX) on March 2, 2026, after a 12.3% collapse on March 1, marking the worst daily decline in the exchange’s history. The plunge followed a violent protest incident in Karachi where demonstrators set an armored vehicle on fire outside the US consulate, escalating regional tensions. The PSX's main index, the KSE-100, closed at 59,800 points after falling from 68,200 points the previous session, reflecting sharp investor anxiety. The sudden halt and subsequent market reset underscore growing vulnerability of emerging markets to localized geopolitical shocks. The unrest in Karachi, a major economic hub, disrupted financial activity and prompted capital flight, with foreign portfolio investors pulling $230 million from Pakistani equities in just two days. Regional instability has heightened concerns about infrastructure security and investor confidence, particularly in energy and defense-linked sectors. In response, energy stocks faced renewed pressure, with XLE dropping 4.1% on regional risk sentiment, while PFE shares dipped 2.3% amid broader market jitters. Crude oil futures (CL=F) rose 1.8% as global markets priced in increased risk premiums due to potential supply disruptions in South Asia. The spike in risk aversion also affected regional EM indices, with India’s Nifty 50 and Turkey’s BIST 100 both declining by over 1.5%. Market participants now await official government statements on security measures and economic stability plans. The International Monetary Fund has signaled readiness to review Pakistan’s $7.5 billion standby arrangement, contingent on improved governance and security conditions. The situation remains fluid, with potential spillover effects on regional trade and energy flows.