Daily Times

The Pakistan Stock Exchange (PSX) is witnessing what was predicted, turbulence. The stock gains in previous days and now losses reflect the deep political uncertainty which keep gripping the country. 10am, on Tuesday, the market looked unaffected by what was happening in the country and the day had a bullish rally. However, come noon, the market quickly descended into a sharp plunge and when the day ended, brokers had lost money with over 3,500 points down. The fluctuation shows one thing: the economy is closely tied with politics. Also, politics thrives or goes down with economy.

When the stock was on boom, government and market players attributed it to regulatory adjustments by the State Bank of Pakistan, encouraging activity in the banking sector. Sadly, this was overshadowed by the escalating political tensions stemming from the opposition’s protest in Islamabad. The federal capital’s lockdown, coupled with widespread security deployments and communication disruptions, amplified investor fears, prompting a mass sell-off. The market’s significant loss reflects not just financial volatility but also the deeper impact of political instability on investor confidence.

This is not the first time financial markets have responded negatively to political turmoil. The frequent disruptions caused by protests, sit-ins, and clashes between opposing factions create an unpredictable environment for both domestic and foreign investors. Each wave of instability deters economic activity, undermines growth, and erodes public trust in state institutions.

Political uncertainty remains a persistent challenge. It hinders the country’s ability to present itself as a stable economy. For sustained economic growth, it is imperative to develop mechanisms that insulate financial markets from political shocks. This requires mature political discourse, adherence to democratic processes, and a commitment to maintaining law and order.

The current crisis serves a lesson for both the government and the opposition: they must prioritise dialogue over confrontation, recognising that economic stability is essential for national progress. Efforts should also be made to strengthen investor protection and confidence through regulatory frameworks that buffer the stock market from political turbulence.

While protests are a democratic right, they must not escalate to a point where they jeopardise the nation’s economy. Similarly, the government must exercise restraint in managing dissent to avoid harming markets. *