KARACHI, Feb 16 (Reuters) Pakistan stocks opened higher on Monday on hopes of improved ties with nuclear-armed neighbour India as the two countries resumed peace talks after a break of more than two-and-a-half years, dealers said.
The benchmark Karachi Stock Exchange 100-share index was up 41.34 points, or 0.85 percent, at 4,916.50 by 0705 GMT.
Gainers outnumbered losers 156 to 101.
"The formal resumption of peace talks with India has boosted stocks," said Sajjad Mankani, a dealer at Karachi brokerage house BMA capital management.
"Sentiment is positive.
The index is likely to cross the 5,000-point mark this week for the first time in history." The index has already been trading at life-highs, helped by improving economic fundamentals following broad economic reforms and rising profits in listed firms.
Dealers say the prospect of better relations with India fuelled the rally, which Mankani said was broad-based and being driven by local funds and investors.
Neighbouring countries India and Pakistan began their first formal peace talks in over two and a half years on Monday, with their dispute over the mainly Muslim himalayan state of Kashmir high on the agenda.
The three days of meetings in Islamabad between foreign ministry officials are seen as 'talks about talks' and will aim to set the agenda and structure for what is likely to be a long, drawn out dialogue process.
Eighteen months after they almost started a fourth war, a gradual rapprochement between the bitter enemies was sealed last month in a groundbreaking meeting between Indian prime minister Atal Behari Vajpayee and Pakistani president Pervez Musharraf.