The choice of PM pleased traders

The Karachi stock exchange index rose by 3.4% to close at 5,279 points.

The appointment of Shaukat Aziz as prime minister has helped reassure investors that a programme of economic reform will continue apace.

The markets had been in an uncertain mood since the resignation of Zafarullah Khan Jamali on Saturday.

"Shaukat Aziz enjoys credibility for his professionalism not just in Pakistan, but also in financial circles abroad," said Shoaib Memon, chief executive of brokerage house Al-Falah Securities.

Mr Aziz is a trusted ally of Pakistan's President General Pervez Musharraf and has introduced sweeping economic reforms to revitalise Pakistan's ailing economy and managed to avoid an embarrassing default on international debt.

"He has proved himself to be the most successful finance minister, meeting most of the budgetary targets and completing two IMF programmes," said Aqeel Karim Dhedi, chairman of AKD Securities.

"We expect a lot from him," he added.