Tensions between New Delhi and Islamabad have hit a boiling point following the Uri terror attacks which left 18 Indian soldiers martyred.
As a result Pakistan’s stock market took a beating on September with the Karachi Stock Exchange plummeting 569 points to close at 39,771.
Local media reports suggest that closure of airspace over northern areas and an aggressive “exercise” sorties by Pakistan Air Force (PAF) jets fuelled the rumours that the country’s armed forces were preparing for a possible Indian attack, which drove its stock market down.
Individual small investors dealing with ‘penny stocks’ were responsible for panic selling, the Dawn reported. Former Karachi Stock Exchange chairman Arif Habib blamed the ‘hype’ surrounding a possible confrontation with India as the primary cause behind the fall in stock market.
Earlier, Pakistan’s state-run airline cancelled all flights to Gilgit-Baltistan on September 22 after airspace over the region was closed by the aviation regulator against the backdrop of a spike in tensions with India.
PIA spokesman Danyal Gilani said on Twitter:
Due 2 northern areas airspace restrictions PIA’s 21st Sep’s flights to Gilgit, Skardu & Chitral ve been cancelled. Inconvenience regretted.
— Danyal Gilani (@Danyal_Gilani) September 20, 2016
“Despite the confusion, Inter-Services Public Relations and the PAF’s media directorate chose to keep mum and the official silence only fuelled rumour mills,” the Dawn reported.
— Umar Khattak (@iUmarKhattak) September 21, 2016
Official details about the exercises will be released in the coming days, Dawn said.
According to Pakistan media reports, PAF jets were seen landing on and taking off from the motorways, which military officials said was part of a routine training exercise called ‘Highmark’.
Meanwhile, India has come down heavily on Pakistan, India has called the neighbouring country a “terrorist state” and accused it of carrying out “war crimes” against Indians through its “long-standing policy” of sponsoring terrorism. India’s strong response at the 71st session of the UNGA came soon after Pakistan Prime Minister Nawaz Sharif levelled allegations of human rights violations in Kashmir.