KARACHI - Karachi Stock Exchange (KSE) has managed to convalesce in the outgoing week, as the benchmark KSE-100 index moved up 5.99 per cent to 697.91 points and settled at 12,353 points as against the week earlier when KSE 100 index saw the largest weekly decline of 1,286 points or 10 percent since May 2005. The severe fall in the stock market for last two months forced SECP and KSE to change in trading rules in the outgoing week, as a result of which the KSE-100 index set a record by gaining maximum points of 960 in a single trading day, besides recovering 1,290 points in the last three sessions of outgoing week. However during the outgoing week, volume hit 73 weeks low by declining 129.4 million shares. The free-float market capitalisation based 30-Index gained 1,090.35 points or 8.1 per cent and concluded at 14,459.14 points. Market capitalisation during the outgoing week surged by Rs203 billion and stood at Rs3.795 trillion. Although, Pakistan Equity Market continued its bearish trend on Monday, SECP's amendments in trading regulations helped rebound market sentiments on Tuesday. This rebound was short lived as prevailing liquidity crunch amid financial year close and rollover in the market forced the index to drop by 99 points on Friday and close at 12,353 points level, analysts said. Though the market reposed positively towards SECP's amendment of limiting the downside by reducing lower circuit to 1 per cent (from 5 pct) earlier, volumes remained thin in the market due to weak investor sentiments. Trading volume nose-dived on Friday in particular and stood at a 6 year low of 30mn shares as most of the stocks were at their lower circuits in the early hours of the last trading session of the week giving investors little opportunity to participate in trading activity, investors added.During the first four sessions of the week, all major regional markets depicted mixed behavior. However, in Friday session, all major Emerging Asian Markets fell in to the red zone amid concerns over rising international oil prices standing above US$142/barrel. The higher crude prices have already pushed inflation at record levels in these economies. Similar pattern was witnessed in Pakistan Market, as foreigners remained net sellers in the week. As per NCCPL data, net foreign selling during the week stood at US$42.4mn. The rollover week started with open interest at Rs16.1bn. However, only Rs6.1bn or 38 per cent was settled during the week with Rs10bn or 62 per cent remaining unsettled. In the CFS market, average CFS investment during the week fell to Rs31bn, whereas average rate rose to 18.5 percent, up 214bps WoW. This is due to financial year close when banks normally limit their investment in CFS.   The worsening economic and political uncertainty of the country i.e. violence in the Northern Areas coupled with economic imbalances and absence of a defined long-term strategy. This explains the increasing outflow of foreign portfolio investment, which is also contributing towards widening the current account deficit. Such bleak situation is also deterring the investor as capital markets continue their downward slide. Despite attractive valuations, the KSE-100 index has lost 3,323 points during 50 working days from 18-April to 27-Junauary. The money market is also facing liquidity problems following the SBP's move, which drained liquidity by increasing cash, reserve requirement (CRR) and statutory liquidity requirement (SLR) by 100bps CRR for deposits of less than 1 year only, analysts said.