KARACHI: Pakistan's main stock exchange closed lower on Thursday, with the benchmark 100-share index of the Karachi Stock Exchange falling 1.21 percent or 280.08 points to close at 22,780.82 points.

Sharp volatility in the value of the Pakistani rupee created a panic like situation at the local bourse.

The benchmark KSE-100 index witnessed a sharp decline of over 500 points during intra-day however, the market managed to recover at the close of day after the local currency posted some gains against the US dollar.

Most of the cement stocks touched their lower limits during the day, dealers said.

DG Khan Cement Ltd fell 2.18 percent to 72.60 rupees while Bank of Punjab was down 1.44 percent to 12.30 rupees.

The rupee ended almost steady at 106.35/106.45 against the dollar, compared to Wednesday's close of 106.37/106.47.

Overnight rates in the money market remained flat at 7.00 percent.