By Faisal Aziz
KARACHI (Reuters) - Pakistan's interior minister appealed for calm on Tuesday in the country's commercial capital Karachi, where shopowners surveyed gutted premises a day after a suicide bomber killed 43 people and triggered a city-centre riot.
The bombing of a Shi'ite Muslim procession in Karachi underscored multiple security challenges facing the nuclear-armed U.S. ally at a volatile time for embattled President Asif Ali Zardari.
The government launched a security crackdown last October against al Qaeda-linked Taliban militants in their tribal strongholds in northwest Pakistan and retaliatory bombings since have killed hundreds of people across the country.
The attack in Pakistan's biggest city may have just been part of a series of bombings designed to spread panic or an attempt to ignite sectarian bloodshed to pile pressure on security forces.
Pakistani security forces patrolled nearly empty streets.
"I appeal to the people of Karachi to stay peaceful. This is the economic hub of Pakistan," Interior Minister Rehman Malik told reporters after attending the funeral of a paramilitary soldier who authorities said pounced on the suicide bomber.
In a sign of growing anxiety, trading at Karachi's stock market ended 75 minutes ahead of the normal 10:30 a.m. British time close due to safety concerns, said one of its officials.
Investors have factored in the violence. But sustained trouble could hurt financial markets in an economy in virtual recession. The index ended 0.12 percent lower at 9,410.66 points.
The provincial government of Sindh, of which Karachi is the capital, declared a public holiday, although banks opened. Public transport was out of service and most shops were shut after religious and political parties called for a day of mourning.
"Our office and the whole building is completely burnt. Everything has been destroyed," said Saleem Khan, who runs a car rental business along what is normally a busy road.
Karachi police chief Waseem Ahmed told Reuters initial investigations showed the suicide bomber was aged between 18 and 20, and that he used 8-9 kilograms of explosives. He said at least 500 shops had been set ablaze.
"It is clear that the terrorists are very well organised. They want to destabilise the country," said Anjum Naqvi, who was part of the bombed procession.
Provincial health secretary Hashim Raza Zaidi said the death toll had risen to 43, while 52 people were still in hospitals.
TRANSPORT IDLE, SHOPS CLOSED
Some grieved before attending funerals, which can be risky -- militants have bombed funerals for their victims, usually in the northwest. Others said their lives had been shattered.
"It's a huge loss for the families of those killed. But what about our families? We are alive and have lost everything," said Mohammad Shams, owner of a shop which makes plastic.
A teeming city of 18 million, Karachi has a long history of ethnic and factional violence, although it has been spared the brunt of Taliban attacks over the past couple of years.
In Monday's bloodshed, the assailant blew himself up at a march by thousands of people marking the climax of Ashura, the Shi'ite calendar's biggest event, despite heavy security.
The attack was the third in as many days in Karachi.
"Karachi is the heart of the country and any incident here does have a negative impact on investor sentiment," said Mohammed Sohail, chief executive of brokerage Topline Securities.
Aside from al-Qaeda linked militants bent on toppling his government, the president is also under political pressure.
Some of Zardari's closest aides and thousands of members of his party could face renewed corruption charges which could weaken him further at a time when the United States is pushing his government for tougher action against militants.
(Additional reporting by Sahar Ahmed & Augustine Anthony in Islamabad; Editing by Michael Georgy and Dean Yates)