2 50,000 Civilians to Flee South Waziristan as Army Continue Offensive Against Taliban

Pakistan’s military said yesterday it killed 60 Taliban and gained ground in the first stage of operations while five soldiers died in the offensive. Soldiers secured “tactical heights” and destroyed six anti-aircraft gun positions in different regions, according to a statement on the military’s Web site. It said 11 of its soldiers were injured.

Three columns entering the Taliban stronghold had advanced about 4 miles (6.4 kilometers) and seized bombs and landmines, the army said. It said “terrorists are vacating their posts” and “leaving behind arms and ammunition , ” Bloomberg reports.

In the meantime, t he regional U.S. military commander was visiting Pakistan on Monday as that country's military continued its massive ground offensive against Taliban militants in the restive northwest tribal region.

Tens of thousands of Pakistani civilians have fled military operations against Taliban militants in South Waziristan.

Gen. David Petraeus, the head of U.S. Central Command, was holding meetings with Pakistani Prime Minister Yousuf Raza Gilani in Islamabad. Also there, on a separate visit, was U.S. Sen. John Kerry, the former presidential candidate who chairs the Senate Foreign Relations Committee.

Gilani told Petraeus it was important that Pakistan and the U.S. work together "to bridge the trust deficit," according to Agence-France Presse.

Gilani called for more international aid for relief efforts and reconstruction in the tribal region of South Waziristan, a refuge and a power base for insurgents operating in Pakistan and along the Pakistani-Afghan border , CNN reports.

Bloomberg quoted Habib ur Rahman, who manages 4.1 billion rupees of stocks and bonds at Atlas Asset Management Ltd. in Karachi, as saying, “Foreigners have started selling today because of the start of the operation in South Waziristan and increasing number of terror attacks. Local investors are following them. Investors want to stay on the sidelines until things on the security front are clear.”

Oil & Gas Development fell 4.6 percent to 106.83 rupees. Among lenders, MCB dropped 5 percent to 215.62 rupees. Habib Bank Ltd., the second-biggest by assets, dropped 4.7 percent to 124.22 rupees, and National Bank of Pakistan lost 4.9 percent to 81.43 rupees.

Merrill Lynch downgraded its outlook on Pakistan banks to “neutral,” as “we believe visible macro and sector improvements have been incorporated into share prices,” analysts Hamza A. Marath of KASB Securities and Alistair Scarff at Merrill Lynch in Hong Kong said in a report dated Oct. 16. The bank sector was up 71 percent year-to-date, the report said.

The KSE100 index’s decline pared its gain this year to 60 percent after sliding 58 percent in 2008, the first annual drop in seven years, Bloomberg reports.