Karachi  - Pakistani stocks slumped to its lowest level on Monday since the start of 2008 on persistent political uncertainty and weak economic signals, analysts said.

The key KSE-100 Index was down by 2.2 per cent or 311 points to close at 13,921.54 points against Friday's close at 14,232.89 points.

This is the first time the market went below 14,000 levels.

"Political uncertainty is the biggest factor," said Mohammad Imran, dealer at First Capital Securities.

Pakistan's ruling coalition entered into a crisis last week when the cabinet members of a major partner, Pakistan Muslim League party of former premier Nawaz Sharif, resigned over the unresolved issue of the restoration of judges deposed by military dictator turned civilian president Pervez Musharraf last November.

Among those who quit was Finance Minister Ishaq Dar.

Even though, Sharif has pledged to continue supporting the government led by slain ex-premier Benazir Bhutto's Pakistan Peoples Party, but the move has left it on shaky ground,

Another factor for the decline was the over bought positions held by weak investors who liquidated their positions on higher interest rates on funding provided by the market.

The Karachi Stock Exchange provides Continuous Funding System (CFS) to its investors. On Monday the CFS rates shot up to 18 per cent as compared with the usual
11-12 per cent.

"An increase in the CFS rates is also a factor in today's decline," said Ateeq Ahmed, an analysts at Capital One Equities. (dpa)