Karachi: Pakistani stocks surged more than 5.5 per cent in early trade on Monday after the government agreed to reinstate a chief justice to defuse a political crisis.
The Karachi Stock Exchange (KSE) benchmark 100-share index was 319.90 points, or 5.56 per cent higher, at 6,070.37 points on turnover of more than 6.23 million shares by 1038 hrs PKT (0538 GMT).
"The uncertainty on the political front has cleared up," said Sajid Bhanji, a dealer at brokers Arif Habib Ltd.
The government agreed to reinstate the top judge, Iftikhar Chaudhry, after an the anti-government lawyers' protest had threatened to bring turmoil as the government struggled to stem militancy and revive a flagging economy.
Dealers said volume would also start building at the KSE.
Trade had dwindled over previous weeks because of the political uncertainty. Dealers said investors were also hopeful of an interest rate cut in a monetary policy statement due to be announced in April as Treasury bills for three, six and 12-months were cut by 90 basis points to 120 basis points last week.
Pakistan's central bank governor said on Friday interest rates should come down over time, given that price rises were trending lower and core inflation was stabilising.
In the currency market, the rupee was marginally weaker at 80.41/51 to the dollar, compared with Saturday's close of 80.36/46 to the dollar.
Dealers said the decision to reinstate Chaudhry as chief justice had had no impact on the currency.
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