The KSE benchmark 100-share index ended 2.28 percent, or 271.73 points, lower at 11,640.46.

Volume was 112.42 million shares compared with 81.15 million shares traded on Tuesday.

"The market has gained pretty sharply in the past week or so, and it was overdue for a correction," said Ashraf Zakaria, a dealer at brokers Ali Hussain Rajabali and Co.

"The volumes were pretty good today but we saw some heavy institutional selling, especially in Fauji Fertiliser and Pakistan Petroleum Ltd (PPL), which led the fall in the index," he said.

Both Fauji and PPL lost 5 percent to hit their lower locks, and closed at 188.44 rupees and 170.79 rupees, respectively.

In the currency market, the rupee weakened to 86.66/71 to the dollar, little changed from the previous day's close, amid steady import payments.

The rupee has firmed in the previous trading sessions on healthy remittances from Pakistanis living abroad, but dealers said a widening current account deficit means that the local currency can see some downward pressure in days ahead.

Pakistan's current account deficit surged to a provisional $908 million in September, compared with a deficit of $201 million in the previous month.

For the July-September quarter, the deficit was a provisional $1.209 billion, compared with $597 million in the same period last year, according to data from the State Bank of Pakistan. [ID;nL3E7LI1CS]

In the money market, overnight rates remained unchanged at the top level of 11.90 percent, amid tight liquidity in the interbank market.

Dealers said the market was also awaiting the result of a fortnightly central bank treasury bills auction, result of which will be announced later in the day.

Copyright Reuters, 2011