Investors were also awaiting the fiscal year 2011/12 (July-June) budget announcement due on Friday. Dealers said investors are expecting the removal of a capital gains tax.

KSE benchmark 100-share index ended 0.24 percent, or 29.93 points, lower at 12,195.59 on turnover of 120.6 million shares.

"After a two percent rise last week, the KSE-100 index oscillated between 40 points and the focus remained on low capped stocks," said Samar Iqbal, a dealer at Topline Securities.

Dewan Salman, volume leader, ended 42.02 percent higher at 3.38 rupees, while Dewan Cement rose 59.88 percent to end at 2.59 rupees.

In the currency market, the rupee eased 85.80/85 to the dollar from 85.65/75 on Friday, amid slightly higher dollar demand from importers.

The rupee hit a record low of 86.50 last week and dealers said the local unit may face pressure amid increased demand for dollar for import payments and a bleak outlook.

There are also concerns about the growing tensions with the West, which could choke off much-needed foreign aid.

Concerns over a reduction in foreign aid have flared since US special forces found and killed bin Laden early this month in a house near Islamabad.

The rupee has lost more than 1.5 percent of its value since then, almost the same as its total loss of 1.53 percent in 2010.

The rupee's slump to a record low comes a little over a month after it rose to an 11-month high suggesting its outlook has weakened because of uncertainty following bin Laden's death.

In the money market, overnight rates ended between 13.50 percent and 13.75 percent, unchanged from Saturday's closed and dealers expect rates to be on the higher side amid tight liquidity in the interbank market.

Copyright Reuters, 2011