Bourse dips to 3-1/2-month closing low; banks drag

Thursday, 10 August 2017 00:31 - - {{hitsCtrl.values.hits}}

Reuters: Shares fell for the ninth straight session on Wednesday, posting their lowest close in three-and-a-half months, with banks such as Hatton National Bank leading the fall.

The Colombo stock index fell 0.28%, or 18.10 points, to 6,506.03, its lowest close since 25 April. It fell 1.5% last week in its third straight weekly drop.

“Turnover levels improved with the increased foreign participation, but the market came down with the continued selling pressure on selected counters,” said Head of Research at First Capital Holdings Dimantha Mathew.

“But the good thing is that foreigners are returning to the market.”

Analysts said the market is coming down due to the negative sentiment after the earnings with the economic slowdown.

Foreign investors net bought shares worth Rs. 124.3 million (about $ 811,358) on Wednesday, extending their year-to-date net inflow to Rs. 26.6 billion.

Turnover stood at Rs. 747.5 million, less than this year’s daily average of around Rs. 884.6 million.

Shares of Hatton National Bank fell 1.3%, Chevron Lubricant Lanka Plc ended 5% weaker and Ceylon Cold Stores Plc dropped 1.2%. Analysts, however, expect equities to gain due to a fall in the yields of government bonds. Sri Lanka’s central bank held policy rates steady on Thursday, and said tightening measures taken in the past are helping cool inflation and credit growth.

Short-term treasury-bond yields fell between 10 basis points (bps) and 16 bps at a weekly auction on Wednesday, while the yields on a 59-month bond dropped by 99 bps and that on a 118-month bond fell by 78 bps at the last week auction.