KARACHI - After going through a difficult patch, the Karachi stock market managed to close on highly bullish note on last trading day of the week, as the KSE-100 index rose by 3.5 per cent or 349 points to conclude the week at 10,259 points. However, average weekly volumes took a downward toll, declining by 18 per cent on weekly basis to 93mn shares, which is 52 per cent lower than the average daily volumes in CY08TD. Stock market is still down 27 per cent and 41 per cent in US$ terms owing primarily to economic slowdown, continued political chaos, deteriorating law and order situations and record decline of Pakistani rupee against US dollar. KSE 30-index up by 528 points or 4.7 per cent and wrapped up at 11,690 points.  The market capitalization increased by Rs.102 billion on week on week basis and stood at 3.195 trillion at the weekend. At the weekend on Friday, the benchmark index went up by 3.6 per cent on the back of the rumour circulating on the stock market that the president Musharraf has decided to resign before the impeachment and the foreign media reports over the expected resignation has whipped up the sentiments of local investors, resulting market saw a strong pull back. Analysts were of the view that market has absorbed the negative impact of the president's impeachment by parliament and now expecting the peaceful solution to this mOlTe i.e. resignation of president and safe exit to him. They maintained that if the outcome of the confrontation between main political parties and president fits with their hopes i.e. swift resolution to the impeachment process and taking desperate measures to keep the economy running by the coalition partners, it will act as a catalyst for the equity markets. Analysts said that it would be difficult to gauge investor sentiment as long as the current political uncertainly prevails. The market, currently fixated on the impeachment issue, awaits a decision to be made by the end of this week. Analysts said that earnings season was in full swing and financial results of OMCs (Shell and PSO) for FY08 were higher than the market expectations, but failed to quench the investors as they could not influence the market significantly. Analysts said that upcoming results of OGDC, ABL, MCB and Lucky cement in the coming week are expected to stir activity in the market. During the outgoing week, Rupee depreciated by 5 per cent against US dollar amid buying by commercial banks to meet their payment obligations. So far this year Pakistan currency has weakened by 23.1 per cent due to declining forex reserves. As a result, foreign investors who are net sellers in Pakistan market since last few months further trimmed their position. Last week they bought shares worth US$22mn and sold US$31.6mn. While as FIPI showed a net outflow of US$9.7mn during the outgoing week. Analysts pointed out that the July-08 trade deficit figures surged by 49% year on year to US$1.644bn. If the trade deficit continues to widen, more pressure will mount over the already deteriorating foreign currency reserves, leading to further depreciation of the rupee. On a brighter note, foreign remittances for July-08 amounted to US$627.21mn; this was a new record high and depicted an increase of 26.5 per cent compared to the same period last year. Also, China Mobile announced its intention to invest US$800mn further this year which should bring about some much needed foreign inflows.