KARACHI (Reuters) The Karachi stock market closed almost flat on Monday, recovering from an early decline of more than 2.6 percent after bargain hunters snapped up cheap shares, dealers said. The Karachi Stock Exchange's benchmark 100-share index closed 0.4 percent, or 4.96 points, higher at 11,380.05 on turnover of 106.74 million shares. The KSE-index took its cues from regional markets in early trade, which declined after the US credit rating downgrade. "Investors started accumulating shares at lower levels which led to the recovery at the local bourse," said Sajid Bhanji, director at Arif Habib Ltd. On Friday, the KSE-index closed at a more than a four-month low. Dealers said investors also bought on hopes of strong corporate profits, due to be announced in coming days. APP adds from Lahore and Islamabad: Lahore Stock Exchange gained 26.43 points on Monday as LSE-25 index, which had opened at 2762.06 points, closed at 2788.49 points. The market's overall situation, however, did not correspond to an upward trend as it remained at 2.680 million shares to close against previous turnover of 3.377 million shares, showing a difference of 696,698 shares. While out of the total 99 active scrips 20 moved up, 55 remained equal and 24 shed values. Pakistan Petroleum Limited, Fauji Fertilizer Company and Honda Atlas Cars (Pak) were major gainers of the day by recording increase in their per share value by Rs 3.69, Rs 3.09 and Re 0.93 respectively. Millat Tractors Limited, ICI Pakistan Limited and Pakistan State Oil Company Limited lost their per share value by Rs 14.40, Rs 7.10 and Rs 6.50 respectively. The volume leader of the day included The Bank of Punjab Limited with turnover of 858,211 shares, Lotte Pakistan PTA Limited with 359,170 shares and Dewan Salman Fibre Limited with 265,395 shares. Meanwhile, Islamabad Stock Exchange (ISE-10 Index) witnessed bearish trend here on Monday as the index closed at 2,507.00 after losing 10.55 points. Manager First National Equity Pvt Ltd M M Hassan said that the stock market performed well here Monday, because of reconciliation policy of government that developed positive relationship between PPP-led government and MQM for peace in commercial hub of the country. He added that majority of local institutions had showed interest to take positions at lower level of index. Senior Equity Dealer, Ismail Iqbal Securities Pvt Ltd, Zaheer Ahmed told APP that down gradation of US in S&P rating caused panic selling by foreign investors. He said that the opening of the market was approximately minus 200 points, but recovered at the closing because of huge buying of local investors.