NEW DELHI: Indian Prime Minister Narendra Modi said on Monday India has only “paused its military action” against Pakistan and would “retaliate on its own terms” if there is any future militant attack on the country.

His comments were the first since Saturday’s understanding between India and Pakistan to stop all military actions on land, in the air and at the sea in a US-brokered ceasefire. 

The escalating hostilities between the two nuclear-armed rivals after a deadly attack on tourists in Kashmir had threatened regional peace.

“We will be monitoring every step of Pakistan,” Modi said in an address to the nation, adding that India won’t “tolerate nuclear blackmailing” by Pakistan and would take stern action for any future terror attack.

“This is not an era of war, but this is not an era of terrorism either. There should be zero tolerance for terrorism,” Modi said.

The PM’s comments come from as Indian and Pakistani authorities both said Monday there was no firing reported overnight along the heavily militarized region between their countries, the first time in recent days the two nations were not shooting at each other.

“The night remained largely peaceful across Jammu and Kashmir, and other areas along the international border,” the Indian army said in a statement, adding that no incidents had been reported.

Senior military officials from India and Pakistan spoke via a hotline on Monday, the state-run Pakistan Television reported. It gave no details, but the two sides were to assess if the ceasefire was holding and how to ensure its implementation. There were fears it would not hold after they accused each other of violations just hours after it was announced.

Local government officials in Pakistan-administered Kashmir, called Azad Kashmir, reported no incidents of cross-border firing along the Line of Control and said that civilians displaced by recent skirmishes between Pakistani and Indian forces were returning to their homes.

Pakistan’s military spokesperson, Lt. Gen. Ahmad Sharif, said late Sunday that Pakistan remains committed to upholding the ceasefire and will not be the first to violate it.

Soon after the ceasefire announcement on Saturday, Pakistan reopened all of its airports and restored flight operations. India followed up Monday with reopening of all the 32 airports that were shut temporarily across northern and western regions due to the flare up in tensions.

“It’s informed that these airports are now available for civil aircraft operations with immediate effect,” the Airports Authority of India said in a statement.

The militaries of the two countries have been engaged in one of their most serious confrontations in decades since last Wednesday, when India struck targets inside Pakistan it said were affiliated with militants responsible for the massacre of 26 tourists in Indian-controlled Kashmir. The tourists, mostly Indian Hindu men, were brutally killed in front of their families in the meadow town of Pahalgam last month.

India accused Pakistan of backing the militants who carried out the massacre, a charge Islamabad denied. The incident first led to a spat of tit-for-tat diplomatic measures by both the nations, sending their bilateral ties to a near historic low.

The two expelled each other’s diplomats, shut their airspace, land borders, and suspended a crucial water treaty.

After Wednesday’s strikes in Pakistan, both sides exchanged heavy fires along their de facto border in the restive Kashmir region followed by missile and drone strikes into each other’s territories, mainly targeting military installations and air bases. Dozens of civilians were killed on both the sides in heavy shelling, the two countries said.

The Indian military on Sunday for the first time claimed its strikes into Azad Kashmir and Pakistan last week killed more than 100 militants, including prominent leaders.

Lt. Gen. Rajiv Ghai, the director general of India’s military operations, said India’s armed forces struck nine militant infrastructure and training facilities, including sites of the Lashkar-e-Taiba group that India blames for carrying out major militant strikes in India and the disputed region of Kashmir.

Ghai said at least 35 to 40 Pakistani soldiers were killed in clashes along the Line of Control, the de facto border that divides the disputed Kashmir region between India and Pakistan. Five Indian soldiers were also killed, he said.

Pakistan’s Information Minister Attaullah Tarar on Thursday said his country’s armed forces had killed 40 to 50 Indian soldiers along the Line of Control. Pakistani military also claimed to have shot down five Indian fighter jets and inflected heavy losses on Indian military installations by targeting 26 locations in India.

The Associated Press couldn’t independently verify the claims made by India and Pakistan.

Air Chief Marshal AK Bharti, the director general India’s air operations told a news conference on Monday that despite “minor damage (s) incurred, all our military bases and air defense systems continue to remain fully operational, and ready to undertake any further missions, should the need so arise.”

Bharti reiterated that New Delhi’s fight was “with terrorists, and not with Pakistan military or its civilians.”

KARACHI: Pakistan’s stocks rose more than 9 percent, the highest single-day gain in decades, and its international bonds rallied on Monday, analysts said, following a ceasefire with India and the approval of $1 billion tranche by the International Monetary Fund (IMF).
The Pakistan Stock Exchange (PSX) suffered losses in the last three sessions since India struck multiple Pakistani cities with missiles on Wednesday. Pakistan responded with fighter jet, drone and artillery strikes and four days of conflict between the two sides came to a halt on Saturday evening after the United States announced a surprise ceasefire.
On Monday, the benchmark KSE-100 index rose by 9.45 percent, or 10,123 points, to close at 117, 297 points, compared to Friday’s close of 107,174 points. The country’s currency and international bonds also surged, paring their losses since tensions rose with India over an attack in Indian-administered Kashmir on April 22.
“The highest single-day gain in almost three decades comes after the ceasefire announcement of India and Pakistan,” Shankar Talreja, head of research at Karachi-based Topline Securities brokerage firm, told Arab News.
The KSE-30 index, which includes the top 30 most liquid companies, increased about 9.7 percent during the intraday trade, forcing the bourse to halt trading at 9:37am Pakistan time for an hour.
The geopolitical tensions had led to aggressive selloffs and fueled widespread investor concerns at the bourse which lost more than 12 percent between April 22 and May 8.
Monday’s rally triggered the upper circuit breaker for the second time in the PSX’s history since July 2023, according to Adnan Sami Sheikh, an analyst at Pakistan Qatar Investment Company Ltd. The otherwise risk-averse investors went on a buying frenzy primarily on the back of a US-brokered ceasefire agreement between India and Pakistan.
“Local individual investors who had been net sellers in the recent past were aggressive buyers,” Talreja said, adding that according to Bloomberg-compiled data, PSX had become the world’s third best performing stock index over the last one year.
The other factor behind Monday’s rally was the IMF’s approval of $1.4 billion loan to Pakistan under its climate resilience fund, and the release of a $1 billion as part of the country’s $7 billion bailout program secured in Sept. last year, taking the total disbursements under the program to $2.1 billion, according to analysts.
The much-awaited inflows will boost the cash-strapped nation’s foreign exchange reserves, which Islamabad seeks to increase to $14 billion by June. The IMF, which the once-near-default Islamabad has visited frequently in recent years, wants Pakistan to hold enough dollars for at least three months of imports.
PAKISTANI RUPEE AND BONDS
Pakistan’s currency marked the first gain in the last seven sessions this month and rose 0.1 percent, with the US dollar closing at Rs281.57, according to the State Bank of Pakistan.
The rupee had devalued 0.3 percent since last month, when Pakistan’s now-de-escalating border tensions with India had first resurfaced.
The South Asian nation’s global bonds also rallied sharply and rose as much as 5.7 cents globally, Reuters news agency reported, citing Tradeweb data. Most of the bond maturities have clawed back the losses sustained since April 22.
“The investors are now perceiving lower country risk premium for Pakistan,” Talreja added.
Commenting on the developments, Pakistan’s finance adviser Khurram Schehzad said the South Asian nation has much more to offer.
He said positives like the IMF board’s approval, declining interest rate, spillover effect of a potential settlement of the US-China tariff issue, and Pakistan’s “measured and responsible” response in terms of narrative and the actions on ground against India have caught the attention of investors.
“Renewed investor confidence...enhanced IMF funding and support, renewed regional investor interest, one of the lowest inflation rates and stable currency parities in the region all position Pakistan for a more meaningful economic upside moving forward,” he said.