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.

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.

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.

Source: http://news.bbc.co.uk/2/hi/south_asia/7511104.stm

So what is the current government going to do about the fast deteriorating economic situation? Meet and greet in foreign land? Waste millions of precious rupees? Consume expensive buffets (with staff members that weren't supposed to be part of the trip), whilst the common man is dying of hunger and inflation? Can the current government even sustain the growth that Pakistan enjoyed in the past few years? What measures ought to be taken in order to revive the economy? What consequences will there be in a worst case scenario? Surely, the current economic crisis and rapid decline of investor confidence cannot go on forever... Please enlighten...

I am sure during past 7 years before these demo-crazy clowns came to run the show KSE share slumped many atimes but never we had to see such protest because the investors had confidence in the goverment now they have no confidence therefore they are becoming more anxious, I believe it's about time we carry out a no confidence vote in this goverment n kick em out ban PPP and PLM (N) from taking part in elections.

But finally people coming out on streets for the right reassons, good to see that.

Some one please drag Zardari and Nawaz out in the streets and beat them senseless.

if you've got a problem, cut your losses and sell, why protest and further reduce consumer confidence.

It's not as simple as you put it. The consequences of losing investment are far reaching. Let's face it, the current government has really shattered investor confidence that was built during Musharraf's term. That is worrisome to put it mildly. Surely, people can sell and run. Will that be beneficial for Pakistan? I doubt it. Whether I or anyone else protests won't make the slightest of difference. We're merely pondering upon the deteriorating situation and how to possibly recover from it. Ever since these jokers took over the economy has suffered immensely. The KSE has only seen downward trends. Alas, the situation on the ground is what the investor's will judge on. It's quite clear that things aren't going the way they ought to be.

Stock market slump is not an exclusively Pakistani story. It is happening across the world. Right next door, BSE Sensex lost nearly 40% in six months. its because of a combination of factors.. international and local. predominantly us subprime meltdown and oil price surge leading to dollar slump. governments can hardly do much in the situation. i agree with platinum its better to cut loses when the slump begins rather than accrue loses. then buy at the bottom. the index definitely will have to come back up later if not sooner, even if its not all the way up as in the past.

Spot on. The crashes are a worldwide occurrence, but that's not the main concern. How can we particularly in such circumstances afford to lose investor confidence? Everyone knows that due to governments quarrel with opposition parties the economy is being affected. No one seems to give a crap about solving the issue. Something that could've easily been prevented had the government been sincere in solving their problems from the start. Add inflation, trade deficit, insecurity etc. on top of that to make matters worse.

That may be so, but in the earlier part of this year (right before election time) the stock market was up (slightly above 15,000), while the rest of the world's stock markets were spiraling downward. Even after the elections the stock market remained stable. The incompetence of the government and the instability brought by that incompetency has led to a loss of investor confidence which has resulted in the bearish trend you see. I agree, the world market itself is in a slump but the new government just added fuel to the fire by losing investor confidence.

Cutting losses is a good idea but what about those people who cannot do anything but trade in KSE. They don't have any qualifications.Their bread and butter is tied with KSE.

Every one can simply bail out but this means losing 75 billion which is bad for the country and it would result in losing investor confidence in other areas too.

My father who used to trade for additional income is bailing out. Forex Trading is the way to go.I am also saving money for it.