Bloodbath at Karachi stock markets as fear of 'Indian retaliation' escalates in Pakistan after Uri attack

Amid speculations in Pakistani media that India may launch surgical strikes, Pakistan's stock markets on Thursday witnessed a sharp decline, with the Karachi Stock Exchange(KSE)-100 benchmark index dropping a massive 569 points to close at 39,771 points. According to a report in Pakistani website Dawn, the small investors ran for cover and the stock markets fell by 1.41% on Thursday, wiping out gains netted in the month of September. 

The panic selling was triggered by individual small investors, who usually generate the biggest volumes in the market, the report says further. Dawn quoted former Karachi Stock Exchange chairman Arif Habib saying the stock markets tumbled on the hype created by the TV media about tensions between Pakistan and India after the recent terror attack in Uri in Kashmir.

Some media houses also aired reports claiming that Indian Army had been moved to forward locations near the Line of Control (LoC) and the International Borders.

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Pakistan's decision to close airspace over the country’s northern areas and flights by Pakistan Air Force (PAF) fighter planes on Wednesday fuelled rumours that the armed forces were preparing for a possible Indian attack. 

The rumors of the possible Indian retaliation after the Uri terror attacks in Kashmir drove the stock market down when the markets opened on Thursday.

Tensions between the two nuclear-armed neighbours are running high following the terrorist attack on an amry camp at Uri Sector in Kashmir and it caused speculations of Indian retaliation on social and mainstream media in Pakistan.

India attacks Pakistan after Sharif's peech at UNGA

In its sharpest attack on Pakistan, India on Thursday called it a "terrorist state" which carries out "war crimes" by using terrorism as an "instrument of state policy", after Pakistani Prime Minister Nawaz Sharif glorified Hizbul commander Burhan Wani at the United Nations.

India also strongly rejected Sharif's call for "a serious and sustained" bilateral dialogue "without any conditions", saying that Pakistan, which "seems to be run by a war machine rather than a government", wants talks with a "gun in its hand".

Strongly reacting to Sharif's remarks at the UN General Assembly session, Minister of State for External Affairs MJ Akbar described them as full of "threat, bluster and complete disregard of facts" as he said glorification of Wani by him at the world forum is an act of "self-incrimination" by Pakistan.

He said it is "shocking" that a leader of a nation can "glorify a self-declared self-advertised terrorist" at a forum such as the United Nations General Assembly.

India, the US and Afghanistan have reaffirmed their shared interests in combating terrorism and advancing peace and security in the region as they explored ways to "coordinate and align" assistance in the war-torn country with priorities of the Afghan government.

With inputs from PTI