Bourse dips but foreign inflow tops Rs. 361 m

Reuters: Stocks fell to a two-month low on Tuesday despite foreign inflows as retail investors sold on worry about the economy after the Government raised fuel prices.

The Government raised fuel prices to record levels on Saturday to prevent the State-owned oil firm suffering further losses. Investors expect more pressure on already near-record high inflation.

The main share index ended 1.15% or 66.13 points weaker at 5,669.48, at its lowest since 31 December.

“Many investors were on the sidelines awaiting direction on interest rates,” said a stockbroker who declined to be identified.

Analysts said interest rates could reverse a falling trend as the Government may seek expensive commercial foreign borrowing. Turnover was Rs. 713.97 million ($ 5.60 million), well below this year’s daily average of Rs. 1.06 billion.

Foreign investors bought a net Rs. 361 million worth of shares, but they have been net sellers of Rs. 383.37 million worth of rupees this year.

The rupee ended weaker at 127.47/50 to the dollar from Friday’s close of 127.30/45, on importer dollar demand, dealers said.