Main stock index of Karachi Stock Exchange (KSE) ended flat on Friday in the lowest ever trading volume as cautious investors stayed on the sidelines due to the global financial crisis and the country's weak economic fundamentals.

KSE benchmark 100-share index ended 0.02 percent, or 1.71 points, lower at 9,200.60 points.

Volume was 2.45 million shares traded. The previous lowest volume was 3.53 million shares traded on Wednesday.

"Clearly, the turnover shows a lack of interest from investors," said Sajid Bhanji, a dealer at brokers Arif Habib Ltd. "Investors are still waiting for some positive outcome on the economic front."

The KSE-index has shed 34.6 percent since the beginning of the year and is 41.5 percent lower than a life high set in April.

Exchange authorities placed a floor on the main index on Aug. 28 to prevent it from dropping below 9,144 points. The KSE board will review the floor on Sept. 25.

Dealers said investors were worried about the country's weak economic outlook with the rupee hitting a record low of 78.25 on Friday, inflation at more than 25 percent and dwindling foreign reserves.

Foreign currency reserves were down to $8.91 billion in the week that ended on Sept. 13. Analysts said $8.91 billion was not even enough to cover two full months of imports.

Dealers said investors were also cautious after events on Wall Street, where Lehman Brothers filed for bankruptcy protection and rival Merrill Lynch agreed to be sold to Bank of America for $50 billion.

The US government then bailed out insurer AIG for $85 billion.

Dealers said the floor on the index was unlikely to be removed in the Sept. 25 meeting because of the global financial crisis.

Adding to investors worries, is tension with the United States, Pakistan's largest bilateral donor, over US military action against militant targets on Pakistani territory.

Among the most active companies, volume leader Engro Chemicals Ltd fell 1.13 percent to 180.44 rupees, Hub Power Co Ltd was flat at 21.46 rupees and NIB Bank also was unchanged at 8.45 rupees

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