ISLAMABAD, Nov 5: The Securities and Exchange Commission of Pakistan (SECP) has announced that it will initiate an inquiry into Monday’s market manipulation in the shape of rumours about the ouster of President Musharraf in counter coup that caused Karachi Stock Exchange to plunge by 635 points in a single day.

The commission has taken the cognizance of the extreme volatility of the stock market, which was precipitated to a very large extent due to malicious rumour mongering by certain “vested interests”,” said the official spokesperson of the commission in statement issued here on Monday.

He said the SECP would carry out a detailed investigation to ascertain market manipulation and unfair trade practices. The commission has urged market participants to desist from rumour mongering.

Sources told Dawn that the SECP believed that the rumours about the ouster of Musharraf in a counter coup by Vice Chief of Army Staff Gen Ashfaq Pervez Kiani were created inside the stock market by some vested interests (which also include some brokers) who were not satisfied with the natural bearish trend in the bourses after the imposition of emergency.

These sources said that probably the Securities and Exchange Commission of Pakistan would begin the probe from Tuesday, which will be one of the most difficult investigations in the history of the commission as the it would be hard to bring forth evidences of whether the rumours reached the market from outside or whether speculations were generated inside the stock market and spread from there taking the whole country into its lap by afternoon.

They said the rumours did the damage as the government was very slow to clarify the situation by issuing a denial in time. The denial came when the trading sessions were over.

Market sources said that the first trading session on Tuesday would ascertain whether the government’s denial has restored the shaky confidence of investors.