The research work illustrates that impact of terrorist attacks, political events and financial crises on eight divergent sectors of PSX for daily sample data set from 2004 to 2014. There are two different methodologies that Event Study Methodology and Impulse Indicator Saturation, being employed to check the significance of the events on returns and volatility series. Results indicate that each sector reacts differently in response to different type of news. Almost all the sectors react on the occurrence of Political Events, few sectors reacts in response to the Terrorist Attacks where all the sectors significantly react in response to the Global Financial Crises except chemical sector. However, the results under two different methodologies are almost similar though Impulse Indicator Saturation able to provide better results in comparison to the Event Study Methodology because as it captures all Breaks and Co-Breaks within a sample period, moreover it clearly helps in defining rebounding period of the market. Supervisor: Dr. Attiya Yasmin Javid