The Pakistan Stock Exchange (PSX), based in the financial powerhouse of Karachi, suffered one of its biggest falls this year over fears that the US senate may impose sanctions on Pakistan.
The Pakistani rupee also touched its lowest point-ever at Rs 170.27 against the US dollar over the situation in Afghanistan and rising demand for the dollar.
The Pakistani rupee has been labelled as the worst-performing currency in Asia, partly due to inflation and partly due to a rise in imports by Pakistan.
Among the 560 stocks traded on Wednesday, 60 rose, 489 were in losses, and 11 remained stable.
Business news wire Bloomberg says that the benchmark KSE-100 index plunged its most since March 2020.
Only a fortnight back, the PSX was awarded the best Islamic stock exchange award for 2021 by the Global Islamic Finance Awards for providing a variety of Shariah-compliant products.
The US senate bipartisan bill seeks to impose sanctions on entities and foreign governments which have been identified as providing support to the Taliban militants in Afghanistan. However, this proposed legislation is just a draft which will have to cross many hurdles before it becomes a law.
However, Pakistan has reacted strongly to the proposed bill. The country's foreign office said that "unwarranted" references to Pakistan in a bill that was recently introduced in the United States Senate was "inconsistent" with the spirit of cooperation that had existed between the two countries on Afghanistan since 2001.
Foreign Office spokesperson Asim Iftikhar Ahmad said: "Such proposed legislative measures are, therefore, uncalled for and counterproductive".
Investors fear that a steady decline in US-Pakistan relations—since Donald Trump’s tenure as the US president—over covert support to various shades of militants could lead to Islamabad being removed from the major non-NATO ally status.
Pakistan has been upbraided by many countries for its support to Taliban and other militant groups. With the terror group acquiring power in Afghanistan, many militants are now looking at Pakistan as their next staging ground for attacks.
A large part of the Pakistan Stock Exchange is owned by Chinese investors, who had first bought a 40 per cent stake in January 2017.
The stock exchange had witnessed a terror attack in June 2020 that took the lives of 11 people including four attackers. Many were injured in the attack that was carried out by the Baloch Liberation Army (BLA) which is fighting for an independent Balochistan.
Pakistan rushes helicopter gunships in brutal assault against Baloch fighters
Dasu power project yet to restart as Pakistan falters in paying Chinese investors
Pakistan journalists to take out the long march from Quetta to Islamabad
