KARACHI (AFP) -The stock market has rebounded 27.5 per cent in three weeks, taking advantage of some welcome political stability, which dealers hope can propel the bourse to the heights seen last year. The benchmark index of the Karachi Stock Exchange, the KSE-100, has now recovered more than 58.5 percent since hitting a four-year low of 4,815 points in late January. It closed at 7,635.88 on Tuesday. Political stability is the key that has created positive sentiments and made the market grow tremendously, said Mohammad Sohail, an independent analyst formerly with market intelligence firm JS Research. It is the fastest recovery of our stock market in history, he said. The KSE has been seen as one of the most promising emerging markets in the world, but the global economic slowdown has compounded the woes caused by the political turmoil in the troubled country. Last year, as the slowdown took hold, the country was hit by almost incessant attacks by militants, which deterred foreign investment. The result? The market lost 58 percent of its value in 2008. Market capitalisation dropped from 75 billion dollars the previous year to 19 billion dollars. It was the indexs first losing year since 2004. The rapid turnaround so far in 2009 has been a welcome change, and many analysts stress that the political situation is key to that success at the exchange. The market is expected to grow as long as political stability remains, said Shuja Rizvi, an analyst formerly with brokerage house Capital One Equities. A better law and order situation will strengthen them further. Even though the market has rebounded dramatically, foreign investors remain sceptical, and are selling more shares each week than they buy testament to the instability. But analysts say foreign investors are getting more bullish on the country. Foreigners are still sceptical but their ratio of selling is slowing. This shows they are gaining confidence and it is not as chaotic as January to March when they sold 250 million dollars worth of shares, Rizvi said. Foreign investors were believed to be net sellers of about 7.5 million dollars in shares last week. Local investors have even disinvested their money from foreign countries and invested it here, Rizvi said. We call it the reversal of capital flight. International financial institutions have also shown confidence increasing confidence in Pakistan. Analysts say the governments economic measures are heading in the right direction through prudent macroeconomic polices and needed reforms. Indeed the market has been doing so well, analysts say, that its on the verge of showing one of the ultimate signs of health a correction. Shares will shed a few hundred points soon because it has gained heavily in a very short period, Rizvi said. Correction in the market is due.