War brings spike in some businesses and war downs several businesses – and stock exchanges are the most volatile commodity. In the aftermath of Indian missile strikes and drone intrusions, it was writing on the wall that stocks would crash. But it is heartening to see that the markets recovered swiftly after Thursday’s historic fall. On Friday, the Pakistan Stock Exchange (PSX) bounced back nearly 4,000 points, recovering 3.52% by close of day. Just a day earlier, the market had suffered its biggest-ever plunge, wiping out Rs820 billion in investor wealth following Indian drone strikes on major cities. It is hoped that no signs of further escalation will help calm investor fears. On Friday, it appeared from the very beginning that markets were rebounding after a 6 per cent drop. It showed the return of confidence of investors as panic selling by people and mutual funds caused Thursday’s crash, but now some investors are returning to buy undervalued shares. Technical analysts pointed out that the market had entered “oversold” territory, making it ripe for a correction. Investors who stay focused on the long-term, experts say, should use such opportunities wisely. Another major reason behind the recovery is optimism around Pakistan’s International Monetary Fund (IMF) deal. The Fund is expected to approve a $1 billion disbursement, with more to come under another facility. This development also restored stakeholders’ confidence and helped the market rebound. At the end of the day, it is the Pakistan Army which deserves credit for turning Indian tables on with decisive military responses, including downing (five or three) Indian jets and intercepting drones, for easing panic. The reassurance that the country can defend itself has brought investors back with cautious optimism. Markets may remain unstable, but for now, the worst seems to be over – unless the guns roar again. *