Hundreds of angry investors, upset by plunging Pakistani share prices, smashed windows of Karachi Stock Exchange and scuffles broke out during a protest on Thursday to demand a temporary closure of the market.
'We are looking at the situation and there is no question of suspending the market,' said Razi-ur-Rahman, chairman of Securities and Exchange Commission of Pakistan (SECP), as staff cleared broken glass from the trading hall floor.
A slump in investor confidence accelerated on Thursday, as stocks fell over 4 percent and the rupee dropped by 1.3 percent by midday due to fears of political uncertainty and dire economic challenges, including a double-digit inflation rate.
The Karachi Stock Exchange (KSE) benchmark 100-share index was down 4.13 percent, or 433.51 points, to 10,058.37 at 11:33 a.m (0533 GMT). Volume was 30 million shares and losers led gainers 204 to 14.
The KSE-index is down 14 percent since Monday after the relaxation of curbs on daily movements that had been tightened in late June to halt a precipitate fall in values.
From Monday, daily circuit breakers reverted to 5 percent up or down, having been amended to 1 percent down or 10 percent up in late June, a move that stifled trading volume.
Close to 1,000 mostly small investors gathered in the gardens of the bourse to demand that the KSE close for two days.
Two injured people were taken away after the protest turned violent. Chanting slogans critical of the government, they also demanded the launch of a market stabilisation fund without delay. Authorities had proposed the launch of a 50 billion rupees fund.
A statement, issued after SECP and KSE officials met on Wednesday, said; 'initial financial commitments were received and the participants are meeting to finalize the structure and mechanics of the fund.'
Banking sources though said authorities were struggling to gather even 10 billion rupees for the fund.
In the eastern city of Lahore, some 100 small investors burnt tyres and blocked the road to the local bourse to demand government action.
Pakistan's economic plight is also reflected in a rupee that has weakened 16.9 percent against the dollar since the start of the year. The rupee was quoted at 72.00/10 to the dollar.
'What is needed at this point, is aggressive action from the government to lift sentiment,' said Shuja Rizvi, director of broking operations at Capital One Equities.
Dealers said the 3-½ month old government could not change Pakistan's weak economic fundamentals overnight, but it needed to show greater leadership.
'Together with inflation, a depreciating exchange rate and worries over fuel prices, the main risk to macroeconomic stability comes from the weak coalition government,' said Sayem Ali, an economist at Standard Chartered Ltd in a note.
The central bank last week took measures to stabilise the rupee after it set its weakest ever closing level at 72.85/90 on July 8.
Dealers said there was speculation that the government may limit non-oil, non-essential imports to reduce demand and the central bank may raise interest rates later this month to try to bring rising prices under control.
The key discount rate was raised to 12 percent from 10.5 percent in May. - Reuters