Pakistani stocks fall on light trade

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 Exchange8217;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 army8217;s operations,but analysts say the move is likely to fray ties and could harm the country8217;s economy.

In the currency market,the rupee ended at 85.93/96 to the dollar,little changed from Friday8217;s close amid steady demand for dollars from importers,dealers said.

The rupee hit a record low of 86.50 in May,and dealers said the local unit is expected to stay largely stable in the medium term because of increased remittances from Pakistanis working abroad.

According to official data,remittances topped 10 billion for the first time,hitting 10.1 billion in the first 11 months of the 2010/11 fiscal year,an increase of 25.20 percent compared with the same period last year.

In the money market,overnight rates were unchanged at 13.90 percent in tight liquidity,dealers said.