Karachi  - Pakistani stocks nosedived 4.11 per cent Monday ahead of a central bank meeting that was expected to bring a jump in interest rates, traders said.

The benchmark KSE-100 Index of the Karachi Stock Exchange fell 453.68 points to close at 10,578.49.

The plunge was seen a day before the State Bank of Pakistan was forecast to lift its discount rate by 1 per cent to 1.5 per cent to fight inflation.

A rate hike could make investments in stocks less lucrative for investors compared with government-sponsored bonds.

The central bank's meeting is its first review of monetary policy for the fiscal year, which began at the beginning of the month. Measures to control surging inflation were expected to be at the top of the agenda.

Economists said increasing interest rates is the most effective tool to rein in rising inflation.

Pakistan is facing a 30-year-high inflation rate of more than 12 per cent because of soaring international oil prices, high prices of other commodities and a domestic food shortage. (dpa)