Pakistan conducted strikes inside Iran, targeting separatist Baloch militants two days after Tehran said it had attacked the bases of another group within Pakistani territory.
It is undergoing a tough $3 billion International Monetary Fund (IMF) bailout programme that pulled it from the brink of default last summer.
Pakistan's international bonds fell after its foreign ministry said it conducted strikes inside Iran on Thursday, two days after Tehran attacked the bases of another group within Pakistani territory.
Earlier in the day, Pakistan's benchmark share index fell 1.6% after Pakistan said it conducted strikes inside Iran, before recovering some ground.
Pakistan's economic ties with Iran, while not huge, are important for Islamabad as it struggles to supply its western- most regions in Balochistan with critical commodities, including fuel and electricity.
Persons:
Aneel Salman, Salman, Pakistan's, Hasnain Malik, Ariba Shahid, Karin Strohecker, Amanda Cooper, Bernadette Baum
Organizations:
Baloch, Monetary Fund, Liquified Petroleum Gas, Islamabad Policy Research Institute, Pipeline
Locations:
KARACHI, LONDON, Pakistan, Iran, Tehran, Tradeweb, Islamabad, Balochistan, Afghanistan, Russia, India, Karachi, London