The Pakistan Stock Exchange (PSX) saw a sharp drop in its value on Thursday. The KSE-100 Index plunged by over 2,500 points during the early hours of trading. However, the market showed some recovery but remained negative by 786 points, at 116,439.83. This sharp decline is largely attributed to the worsening global economic situation. In addition, escalating tensions between Pakistan and India added to the market’s instability. The PSX fell further due to investors’ fear of growing geopolitical risks. A key trigger was India’s decision to suspend the Indus Waters Treaty with Pakistan. This came after an attack in Pahalgam, Indian Illegally Occupied Jammu and Kashmir, which killed 26 tourists. India blamed Pakistan for the attack, heightening concerns of a diplomatic standoff. As a result, many investors became cautious and opted to sell off their holdings. The uncertainty in the region has led to risk aversion, with traders waiting for more clarity before re-entering the market.