ISLAMABAD, June 10: The Karachi Stock Exchange (KSE) 100-index recorded a stunted growth of just 3.7pc during FY07-08, compared with a 23pc growth last year, the Economic Survey revealed.

In US dollar terms, things looked more dismal with the market posting a negative growth of 7.1 per cent.

Political uncertainty and events like the imposition of emergency, the Lal Masjid stand-off and assassination of Benazir Bhutto had badly hampered the performance of capital markets in the outgoing financial year.

During the same period, India’s Sensex 30 index displayed impressive performance by rising 15pc in dollars terms and by more than 11pc in local currency, the Economic Survey 2007-08 pointed out.

The survey reveals performance of KSE -- the country’s leading stock market--from July 2007 to end of May 2008. The sharp drop in share values during the first week of June has not recorded, which was attributed to speculations over the government’s plan of imposing the Capital Gains Tax (CGT).

Aggregate market capitalisation (AMC) of the KSE, by the end-May 2008 declined to $56 billion (Rs3.746 trillion) from $62.3billion (Rs3.781 trillion) in the corresponding period last year. That represented a decrease of Rs35billion in AMC over the same time last year. Analysts noted that last year the AMC was 35pc higher than the year before.

The outgoing fiscal year began with the Lal Masjid incident in early July when the issue of the restoration of the deposed Chief Justice of Pakistan Iftikhar Mohammad Chaudhry, had taken the country by storm. Speculation about the imposition of emergency rules in the country