CSE slips from 2-week high

Tuesday, 17 July 2018 00:00 - - {{hitsCtrl.values.hits}}

COLOMBO (Reuters): Sri Lankan shares edged lower yesterday from their highest close in two weeks in lighter-than-usual trading as foreign investors sold stocks.

The Colombo stock index ended 0.12% weaker at 6,130.62, slipping from its highest close since 29 June hit on 13 July. It rose 0.5% last week, its first weekly gain in eight weeks.

“Today we saw some profit taking. There was some selling by those who managed to buy at the bottom,” said First Capital Holdings Research Head Dimantha Mathew. “There is not much of selling pressure. So we don’t think this selling will continue for long time.”

Turnover stood at Rs. 304.1 million ($1.9 million), around a third of this year’s daily average of Rs. 895.8 million.

The benchmark stock index hit its lowest close since March 30, 2017 on 4 July, and has declined for 20 sessions in 27 through yesterday.

A downward revision in economic growth estimate by the central bank has hit sentiment, analysts said.

Economic growth in 2018 is likely to be between 4% and 4.5%, falling short of an earlier estimate of 5%, the Central Bank’s Governor, Indrajit Coomaraswamy, said early this month.

Foreign investors sold equities net worth Rs. 177.7 million yesterday, extending the year-to-date net foreign sale to Rs. 2.6 billion.

Shares in Cargills (Ceylon) fell 3.7%, while Lanka ORIX leasing Co lost 3.6%. The biggest listed lender Commercial Bank of Ceylon closed 1.5% lower.

Investors are waiting for some positive news both on the economic and political front, said analysts, adding that the Government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.

The International Monetary Fund said on 20 June that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs.