Pakistan Markets Face Worst Month Since 2023 Amid India Tensions

Escalating tensions between Pakistan and India, particularly following a deadly attack in Jammu and Kashmir, have severely shaken investor confidence in Pakistan, leading to the country's worst performance in dollar bonds and stocks since 2023. Pakistani assets saw declines of nearly 4% in dollar bonds and almost 3% in equities for April, in stark contrast to India’s relatively resilient markets. The situation worsened after Pakistan's Information Minister warned of potential imminent military action by India, further fueling market fears. Analysts note that the near-term outlook remains uncertain, though any de-escalation could stabilize markets and potentially trigger a small rally in Pakistani bonds and equities. Despite earlier positive sentiment due to a ratings upgrade and falling oil prices, the current crisis has overshadowed those gains. Some see the recent drop in bond prices as a possible buying opportunity if tensions ease.