NEW DELHI: Pakistan's stock market on Wednesday fell an unwitting victim to the recent spike in Indo-Pak animosity, with the KSE30 index tumbling well over 500 points in the wake of reports that war was about to begin following the Uri base attack in which 18 Indian jawans were killed.The stock market took its cue from unscheduled closure of airspace in the northern part of the country. The airspace closure coincided with stepped-up flights by Air Force planes, with some planes even landing on a motorway.Media reports from Islamabad said the Karachi Stock Index went into crash mode as market participants mistook Pakistan Air Force 's preparatory drills to be the last-minute exercise before the impending war. Pakistani authorities did not care to clarify those were only practice sorties, and rumour mills went abuzz with speculations that the brewing war between the two neighbours could begin anytime.The consequent panic in the market led KSE30 to nosedive by a huge 569 points to end the day at 39,771 points, the Dawn said in a report. The report said the panic selling was triggered by small individual investors dealing in penny stocks. Although mutual funds, bank stocks and big companies remained stable, pennies pounded the market hard and by the day's end, the 1.41% fall wiped out the entire gain clocked in the month of September.The KSE30 has given 18 per cent returns so far this year through July 12, making it the best-performing Asian index. Compared with that, the BSE Sensex has given just 6 per cent return in the same period.According to the Dawn report, Former Karachi Stock Exchange chairman Arif Habib said the electronic media which hyped up the tensions between Pakistan and India, was to blame for the crash in markets.Several media organisations in Pakistan also ran reports that said Indian troops had been moved to forward locations along the LoC.Habib said media was giving the impression that a war between the two was at hand.Bilateral relations between India and Pakistan have hit a new low following the militant strike on the Uri base, the biggest Pakistan-sponsored terror attack in a long time. While Pakistan has fallen back upon its time-tested strategy of denial, India has taken up the Uri episode at various global fora and exposed Pakistan's lies at the UN. Now, with the tabling of the US bill to designate Pakistan a terrorist state and China joining the war of words with overt backing of its all-weather ally, it threatens to unfold a tense new face-off of global powers in the geopolitical bullring that is South Asia.