Pakistan stocks tumbled, with the benchmark index posting its biggest retreat in five years, and the rupee weakened the most in four months amid growing concern that a planned protest against Prime Minister Nawaz Sharif will spur political instability.
The KSE 100 Index slumped 4.5 percent to 28,071.41 at the close, the most since February 2009. Oil & Gas Development Co., the nation’s biggest company by value, had the steepest drop in three years while MCB Bank Ltd. fell the most since September.
Muhammad Tahir-ul-Qadri, a popular cleric, said yesterday he will join opposition leader Imran Khan in an Aug. 14 protest seeking Sharif’s resignation and fresh elections. The KSE 100 has risen 16 percent this year through last week on speculation government reform efforts, including the privatization of state-owned companies and lower power subsidies, will improve the nation’s economic stability after it received a loan from the International Monetary Fund last year.
“Fuel has been added to the fire with the two leaders protesting together,” Qasim Anwar, an equity dealer at AKD Securities, said by phone from Karachi.
Tahir-ul-Qadri, known for his sit-in in Islamabad against President Asif Ali Zardari’s government in January 2013, heads Pakistan Awami Tehreek, an Islamic group with more than 90 branches worldwide. Khan, whose Tehreek-e-Insaaf is the third-largest party in parliament, has alleged the May 2013 general elections were rigged.
“Plans for protests will sabotage the peace needed for economic uplift,” Sharif told a gathering in Islamabad today. “I have offered talks: come and tell us which of our policies are wrong. We should hold talks instead of holding protests.”
The rupee fell 0.5 percent to 99.3117 per dollar, set for the biggest drop since April 18, and the 8.25-percent dollar bond maturing in 2024 rose 0.06 percent to $103.11.
General Raheel Sharif, chief of the army, has convened a meeting at the military headquarters in Rawalpindi today to discuss security in Islamabad, Dawn newspaper reported. The government has called in the army ahead of the planned protest on Aug. 14, the newspaper said.
The KSE 100 climbed to a record on July 24 and the rupee is the best performer among 13 currencies in Asia this year as Sharif raises funds through overseas asset and bond sales to narrow the budget gap and boost growth. Sharif’s previous terms were ended prematurely by the army, which has ruled the nation of 193 million people for more than half of its history.