Asif Ali Zardari, the widower of former Pakistani Prime Minister Benazir Bhutto, was sworn in as President yesterday, in what allies and investors hoped was a step towards stability after months of uncertainty.

Mr Zardari swept an election on Saturday when members of the two-chamber Parliament and four provincial assemblies voted on a replacement for former army chief Pervez Musharraf, who resigned last month, nine years after taking power in a coup.

A spokesman for Mr Zardari's Pakistan People's Party (PPP) said the new President would strengthen democracy and help the poor.

"Asif Ali Zardari is a shield, protection to strengthen democracy and provide relief to the masses," the spokesman, Farzana Raja, told state television shortly before the swearing-in ceremony.

"Democracy will work and this government will complete its five years and you'll see after five years, Pakistan will appear on the world map as a new country with new hope," she said.

Investors and Pakistan's allies, led by the US, hope the election will bring some stability after months of political turmoil and rising militant violence.

The uncertainty has dragged stocks and the rupee sharply lower and analysts say investors now want to see concrete action to bolster the economy. The Karachi Stock Exchange benchmark share index was marginally lower on Monday.

The index rose for six consecutive years from 2002 and was one of the top performers in Asia during that period.

But it has plunged 41 per cent from a lifetime high in April and is down 34 per cent since the beginning of the year because of the political uncertainty and weak economic fundamentals.