KSE declines by 98 points

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KARACHI: Stock prices at Karachi Stock Exchange (KSE) ended lower on Monday in light trade as investors remained cautious amid concerns over the fragile security situation in Karachi, as well as the suspension of $800 million in U.S. military aid to Pakistan.

More than 100 people were killed last week in Karachi, Pakistan's biggest city and commercial capital, in a surge in political violence.

Despite a lull in violence over the weekend, dealers say investors remain concerned.

"The extremely low volumes clearly show investors are very concerned," said Sajid Bhanji, director at brokers Arif Habib Ltd.

The Karachi Stock Exchange's benchmark 100-share index ended 0.79 percent, or 98.22 points, lower at 12,291.90, on turnover of only 31.59 million shares.

Volume fell to a 10-month low of 29.53 million shares on Friday.

"Investors are very concerned about the law and order situation in Karachi, and to add to that, the announcement by the U.S. that it was withholding part of its aid to the military added to the negative sentiment," said Bhanji.

The Pakistani army spokesman said on Monday that the U.S. decision to suspend $800 million in military assistance will not affect the army's operations, but analysts say the move is likely to fray ties and could harm the country's economy. (Reuters)