Shares snap six-day losing streak, rupee ends firmer

Friday, 13 December 2019 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Shares gained for the first time in seven sessions on Thursday, helped by large-cap LOLC Holdings PLC, while the rupee ended higher.

The benchmark stock index closed up 0.65% at 6,099.66, recovering from a near four-week closing low in the previous session. The bourse fell 1% last week, but is up 0.8% for the year so far.

Shares in LOLC Holdings jumped 12% after a speculation that the company was going to sell its stake in a unit in Cambodia. The company said it has been in the process of exploring possibilities of a sale of whole or part of its holding in Prasac Micro Finance Institution Limited, Cambodia.

The index touched its highest level since 25 June 2018 on 2 December, lifted by hopes of booming economic activity after the new Government cut some key tax rates.

However, foreign investors were net sellers in the equity market for 30 sessions out of 33, offloading Rs. 7.7 billion ($42.78 million) worth of shares.

They sold a net Rs. 54.1 million worth of shares on Thursday, extending the year-to-date foreign outflow to Rs. 11.3 billion, according to index data. The rupee ended 0.14% firmer at 180.80/181.00 per dollar, compared to Tuesday's close of 181.05/20, Refinitiv data showed. The markets were closed on Wednesday for a Buddhist religious holiday. The currency is up 1% so far this year.

Analysts said the tax reduction has already been factored in and the market was waiting to see the impact of the new policy. They said investors sold shares that rose on hopes the new Government will encourage an economic boom led by construction.

Analysts and research firms have said the tax cut decision would provide a boost to the economy, but put increased strain on the country's fragile public finances.

Equity market turnover was Rs. 440.9 million, less than this year's daily average of about Rs. 724 million. Last year's daily average was Rs. 834 million.

Foreign investors were net sellers of Government securities on a net basis for the first week in seven, selling a net Rs. 4.2 billion worth of Government securities in the week ended 4 December.

Total foreign outflows from Government securities through 27 November stood at Rs. 47.9 billion, according to Central Bank data.