Karachi stocks fall 3.6% as political clash looms

Karachi: Pakistani stocks ended 3.62 per cent lower, at a near 23-month low, due to investors' fears of a looming clash between a four-month-old civilian government and President Pervez Musharraf, dealers said.

"With no end in sight to the political turmoil, the market will continue to be jittery for local and foreign investors," said Asad Iqbal, managing director at Ismail Iqbal Securities Ltd.

The Karachi Stock Exchange (KSE) benchmark 100-share index fell 3.62 per cent, or 363.65 points, to 9,678.82 on subdued turnover of 57 million shares.

The KSE-index is down 31.2 per cent since the start of 2007 and is 38.5 per cent lower since it made its life high on April 21.

Among the most active companies, NIB Bank fell 5.53 per cent to Rs8.88, Pakistan Petroleum Ltd shed 0.99 per cent to Rs202.20, while National Bank of Pakistan was 5 per cent lower at Rs104.41.

By the time, the market closed Asif Ali Zardari, the head of the ruling party, was still meeting with his major coalition partner Nawaz Sharif in Islamabad to resolve differences over how to handle Musharraf and reinstate Supreme Court Judges who were dismissed by the president during six weeks of emergency rule late last year.

A spokesman for Zardari's party said they had reached a consensus on major issues after a first round of talks on Tuesday night.

Sharif, the prime minister Musharraf overthrew in a military coup in 1999, wants his usurper impeached.

Due to leave for China on Wednesday to attend the Beijing Olympics and meet the Chinese leadership, Musharraf cancelled the trip at short notice.

Musharraf, a US ally who came to power as a general in a 1999 coup, has become overwhelmingly unpopular. His allies were defeated in an election in February that stripped him of parliamentary support.

However, public faith in the civilian led government has also waned because of raging inflation, power outages, and fuel and food shortages, and rising militancy across the northwest.