Stock market dips on profit-taking; foreign buying continues

Reuters : Sri Lankan shares ended marginally weaker on Thursday as recent gainers witnessed profit-booking, while foreign buying in the island nation’s risky assets curbed losses.

The Colombo Stock Index ended 0.1% lower at 6,49502.96.

Turnover stood at 531.9 million rupees ($3.46 million) on Thursday, less than last year’s daily average of 915.3 million rupees.

Foreign investors net bought shares worth 23.9 million rupees on Thursday, extending the net foreign inflow in this year to 2.24 billion rupees.

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

“There was bit of profit-taking in stocks which gained last few days. Activity has come down as investors are waiting to see the direction,” said Dimantha Mathew, head of research, First Capital Holdings.

The bourse hit a near two-month high on Monday as declining interest rates and expectations of higher economic growth boosted investor appetite for risky assets.

Shares in Sri Lanka Telecom Plc ended 2.4% weaker while conglomerate John Keells Holdings Plc ended 0.9% down.

Access Engineering Company Plc, which on Wednesday said its net profit for financial year 2017/18 will see a rise of more than 10%, ended 0.9% higher.

Treasury bill rates fell between March and December last year, mainly driven by foreign buying in treasury bonds, resulting in a decline in 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 last week.