They said technically the sudden rise in the index on Monday also triggered profit-taking amid large sale of telecom shares by a foreign brokerage house. The Karachi Stock Exchange 100-share index was down 31.95 points, or 2.81 per cent, at 1,104.23 at end of the first trading session.

"One brokerage house was selling PTCL heavily and others simply followed the trend," said Zain Hameedi, dealer at local brokerage firm. But another dealer said fears that Kashmir pullout plans could raise a political row also troubled investors. "The five to ten minutes before the close of the session (0930 GMT) was simply panic where nobody knew what was happening," said Hameedi.

Militants fighting Indian rule in Kashmir and Pakistan's main Islamic opposition groupon Monday rejected Islamabad's agreement to restore peace on the Kashmir Line of Control as a betrayal. Sharif met US President Bill Clinton in Washington on Sunday and a US-Pakistani statement said "concrete steps" would be taken to restore the ceasefire line to wind down the worst military standoff between India and Pakistan in 30 years.

Pakistan's main Islamist party Jamaat-e-Islami called for a country-wide protest against the agreement. Pakistan Telecom dropped one rupees to 20.65 rupees, and Hub Power one rupees to 15.80.

However, in India, share prices improved further on the Bombay Stock Exchange (BSE) today on select buying support by foreign funds pushing the Sensex to the highest level since August 14, 1997. Hectic buying by foreign funds and local operators was witnessed in cement and engineering goods sectors.

Sensex (BSE sensitive index) started higher at 4326.77 and moved in a narrow range of 4350.40 and 4307.17 as a result of losses in key index scrips, before closing at 4332.70 with anet gain of 26.30 points against yesterday's close of 4306.40. The BSE-100 index also rose by 17.18 points to 1871.41 from the previous close of 1854.23.