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Pakistan's stocks, sovereign bonds and currency were lifted on Friday by growing hopes that the country can unlock funding from the International Monetary Fund after the government's overnight decision to end a months-old freeze on fuel prices.
Pakistani stocks jumped more than 2 per cent and the country's sovereign dollar bonds jumped more than 3 cents.
Late on Thursday the government announced it would hike fuel prices after an agreement with the IMF that included an end to fuel subsidies, allowing the resumption of aid from a $6 billion package signed with the IMF in 2019.
"The market is reacting to the government's move to withdraw fuel subsidies," Saad Hashemy, executive director at BMA Capital Management, told Reuters. "It shows the government's resolve to address teething issues in the economy and will pave the way for the IMF program and other funding sources."
The benchmark stock index was 2.26 per cent higher at 0544 GMT, according to exchange data. Pakistan's sovereign bond maturing in 2027 gained 3.5 cents to trade at 72.26 cents in the dollar while the more liquid 2025 bonds are up 3.4 cents, Tradeweb data showed.
