Pakistan stocks slide as political nerves return

KARACHI, Jan 2 (Reuters) - Pakistani shares slid 2.3 percent on Wednesday as political nerves suddenly returned to the market ahead of a national address by President Pervez Musharraf.

Musharraf is due to make the televised address at 1500 GMT.

"There were rumours in the market that Musharraf will make some negative announcement in his speech later today," said Shuja Rizvi, director of broking operations at Capital One Equities.

Dealers said the rumours included talk of reimposition of emergency rule or even a resignation, after last week's murder of ex-premier Benazir Bhutto triggered two days of violent unrest.

Officials were not immediately available for comment.

The Karachi market often reverberates to unfounded political rumours. On Monday, selling intensified on rumours of a second political assassination, but these turned out to be groundless.

The Karachi Stock Exchange (KSE) benchmark 100-share index , which had held firm throughout most of the day, suddenly fell more than 300 points in the final 30 minutes of trade.

It ended at 13,354.17 points. Since the assassination, it has lost 9.6 percent of its value.

"Jitters about uncertainty about the election schedule as well as margin calls accelerated the decline towards the end of the day," said Asad Iqbal, managing director of Ismail Iqbal Securities Ltd.

(Reporting by Sahar Ahmed, Faisal Aziz and Mark Bendeich)