Stock market gains to over 6-month closing high on telecom, large-caps

Reuters: Shares erased early losses to close at a more than six-month high on hopes of political stability after the 17 August Parliamentary elections and better corporate earnings in the April-June quarter, brokers said.

The main stock index edged up 0.1%, or 7.34 points, at 7,377.95 on Monday, its highest close since 28 January.

The Bourse has gained 6.6% in a month through Monday.

“Market recovered from the morning decline with gains in telecom shares and distillers,” said Dimantha Mathew, a research manager at First Capital Equities Ltd.

“With some selling pressure, there’ll be a bit of profit-taking here and there, but it may not last long.”

Distillers Company of Sri Lanka Plc gained 1.83%, while Dialog Axiata Plc rose 1.79%.

The index was however dragged down by losses in Nestle Lanka Plc, which fell 1.77%, and conglomerate John Keells Holdings Plc, which lost 0.78%.

The index has been gaining since 7 July on expectation strong corporate earnings and political stability after the election would boost returns, analysts said.

Turnover stood at Rs. 1.3 billion ($9.72 million) on Monday, more than this year’s daily average of Rs. 1.11 billion.

Foreign investors, who sold a net Rs. 12.4 million worth equities on Monday, have offloaded a net Rs. 195.2 million worth of shares so far this year.