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Protest over Pakistan share slump

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Protesters storm the Karachi Stock Exchange

Angry investors have attacked the Karachi Stock Exchange (KSE) in protest at plunging Pakistani share prices.

More than 200 people took part in the demonstration at the country's main stock exchange in the southern city.

A number of windows were broken and at least two people injured, Reuters news agency reports.

The protesters demanded a temporary closure of the KSE to stop further slides. It is down 14% since Monday and reached an 18-month low this week.

There were smaller protests in the cities of Islamabad and Lahore, where demonstrators burned tyres near the local exchanges.

A growing company and consumer debt burden and surging inflation have led to a crisis of confidence in Pakistan's economy, analysts say.

Concern has also been fuelled by political infighting between the new coalition government and its allies, as well as growing US pressure on the authorities to crack down on Islamic militancy in the country.

Smashed windows

The small investors who gathered in the main hall of the Karachi Stock Exchange were alarmed by stock prices falling for the 14th day in a row.

What is needed at this point, is aggressive action from the government to lift sentiment
Shuja Rizvi,
Capital One Equities

By about midday (0600 GMT) on Thursday share values on the KSE had fallen more than 4%, or 433.51 points, to 10,058.37.

The rupee also dropped by 1.3%, continuing a slide which has seen it lose 16.9% of its value against the dollar so far this year.

Investors in Karachi demanded a temporary halt to trading.

When this was denied, some went on the rampage, smashing windows and lights until they were dispersed by police.

"We are looking at the situation and there is no question of suspending the market," Razi-ur-Rahman, chairman of Securities and Exchange Commission of Pakistan (SECP), told Reuters.

The BBC's Barbara Plett in Islamabad says there has been a slump in investor confidence amid doubts that Pakistan's newly-elected government can deal with economic challenges like run-away inflation and wide trade and budget deficits.

A Pakistani trader monitors shares' movements at the Karachi Stock Exchange
A slump in investor confidence has accelerated

The authorities have inherited much of the problem from the previous government, and that has been compounded by high world oil and food prices, our correspondent says.

But economists say lack of leadership from the weak coalition is one of the main risks to macroeconomic stability.

"What is needed at this point, is aggressive action from the government to lift sentiment," Shuja Rizvi, director of broking operations at Capital One Equities, told Reuters.


SEE ALSO
Pakistan acts to stem share fall
24 Jun 08 |  Business
Pakistan's economic woes worsen
29 May 08 |  South Asia
Karachi shares fall on rate rise
23 May 08 |  Business
Pakistan's government in turmoil
13 May 08 |  South Asia
Price of Pakistan's economic woes
14 Apr 08 |  South Asia

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