Bourse slips from near 7-week high on profit-taking

Wednesday, 10 January 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares ended lower on Tuesday, slipping from a near seven-week high hit in the previous session, as investors booked profits in blue chip stocks, while foreign traders continued buying the island nation’s risky assets.

The Colombo Stock Index ended 0.2% weaker at 6,527.14. The Bourse rose 2.3% last week, in its second straight weekly gain.

Turnover stood at Rs. 546.8 million ($ 3.56 million) on Tuesday, less than last year’s daily average of Rs. 915.3 million.

Foreign investors net bought shares worth Rs. 205.5 million on Tuesday, extending the net foreign inflow in this year to Rs. 2.2 billion.

They had net bought Rs. 18.5 billion worth equities in 2017 and Rs. 633.5 million in 2016.

“It’s a small pullback due to some kind of profit-taking,” said Atchuthan Srirangan, senior research analyst, First Capital Holdings Plc.

“There was selling in John Keells. Investors will wait to see whether the selling will continue or will the market absorb the pressure.”

Analysts expect the market to settle at 6,600 levels.

Shares in leading fixed line telephone operator Sri Lanka Telecom Plc ended 4.8% down, while conglomerate John Keells Holdings Plc closed 0.7% lower.

Treasury bill rates fell 188 basis points to 216 basis points between March and end-December 2017, mainly driven by foreign buying in treasury bonds, resulting in declining market interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5%, against an anticipated four-year low of less than 4% last year, Central Bank Governor Indrajit Coomaraswamy said on Wednesday.

The Central Bank kept its benchmark interest rates unchanged in December, saying inflation and private sector credit growth have cooled to manageable levels as policymakers focus on supporting a slowing economy.