MCB Bank drags Karachi index down

Karachi: Pakistan's key stock index fell after the central bank said the South Asian nation may miss its annual growth target on increased risk to the economy. Banking shares led the decline.

The Karachi Stock Exchange 100 Index fell 96.19 points, or 0.7 per cent, to 14,163.40. MCB Bank Ltd., the nation's biggest by market value, fell Rs8.65, or 2.2 per cent, to Rs390.15.

"Risks to the economy are increasing as it is clear that neither the global nor the domestic economic environment is as benign as in the past years,'' State Bank of Pakistan said in its quarterly report on January 5.

Pakistan's Election Commission delayed polls until February 18 after the assassination of former prime minister Benazir Bhutto sparked riots in Pakistan's main cities, including the commercial hub of Karachi, killing as many as 58 people.

The threat of renewed economic complications, after five years of good performance, would be further heightened if prompt actions are not taken to correct the recent deterioration in fiscal indicators, the central bank said in the report.

"The State Bank's comments have hurt investor confidence a little," said Imran Khan, research analyst at First Capital Equities Ltd., in Karachi.