Business | Markets

Karachi index posts biggest weekly fall in three years

Pakistan's stocks had their steepest weekly drop in three years on concern the two largest parties in the governing coalition may split because of a disagreement over the reinstatement of sacked judges.

  • Bloomberg
  • Published: 00:08 June 21, 2008
  • Gulf News

Karachi: Pakistan's stocks had their steepest weekly drop in three years on concern the two largest parties in the governing coalition may split because of a disagreement over the reinstatement of sacked judges.

The Karachi Stock Exchange 100 index slipped 215.67 points, or 1.8 per cent, to close at 11,655.28. The benchmark fell 9.9 per cent last week, the biggest weekly decline since the seven days ended May 27, 2005.

"Investors are reluctant to buy because Sharif and Zardari keep meeting without any conclusion," said Khurram Schehzad, research analyst at Invest Capital & Securities, in Karachi. "That means no solution or meeting point is in sight."

National Bank of Pakistan, the largest by assets, lost Rs7.44, or five per cent, the daily limit, to Rs141.48. Habib Bank, the lender with the most branches, fell Rs8.55, or 4.3 per cent, to rs190.

The impasse between the two coalition leaders may deepen the retreat from the South Asian nation by foreign investors, who slashed their spending on Pakistani stocks to $62.2 million in the 11 months ended May 31, from $1.76 billion a year earlier, according to data from the central bank.

Sharif said in an interview yesterday he is "disappointed and dismayed" with Zardari's failure to honour an agreement to reinstate the judges. The two party leaders also differ over how to remove Musharraf and whether the former army chief should stand trial.

Engro Chemical, the second-biggest urea maker, fell Rs13.77 rupees, or five per cent, to Rs261.78.

Pakistan Telecommunications, the biggest phone service provider declined 62 paise, or 1.6 per cent, to Rs38.

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