Bourse eases from near 3-1/2 year high on profit-taking

Tuesday, 11 November 2014 01:22 - - {{hitsCtrl.values.hits}}

Reuters: Stocks edged down on Monday from a near three-and-half-year high hit in the previous session on profit-taking, led by banks and telecommunication shares.

Rupee forwards edge up on inflows into Govt. securities Reuters: The rupee forwards ended slightly higher on Monday as dollar inflows into some Government securities outpaced importer demand for the greenback, while moral suasion by the Central Bank prevented a fall in the spot currency, dealers said. Traders said the local currency may face pressure as imports continue to rise in a stable exchange rate regime. The spot currency ended flat at 130.90/131.00 per dollar. Dealers were reluctant to trade the spot below 130.90 due to moral suasion by the Central Bank. Three-day forwards, or spot next, which were actively traded because of moral suasion on the spot rupee, ended little higher at 130.98/131.03 per dollar compared with Friday’s close of 131.00/131.10. Dealers said the Central Bank capped the spot next at 131.00 in early trade. “There were some inflows into bonds which helped ease the pressure on the forwards,” a dealer said on condition of anonymity. “The spot was not allowed to trade below 130.90 and the spot next below 131.00.” Central Bank officials were not available for comment.The market expects the local currency to remain weak due to rising seasonal imports at least through November and only start to inch up in December on remittances, dealers said. Overseas investors sold a net Rs. 39.12 billion ($ 299 million) worth of Government securities in the seven weeks through 5 November, data from the Central Bank showed.

Continued foreign buying, low interest rates and better earnings expectations kept investor appetite for risky assets intact. Sri Lanka’s main stock index closed 0.17% weaker at 7,403.38, moving away from its highest closing level since 31 May 2011 hit on Friday. “Overall, a little bit of profit-taking and slight correction were seen as the market went up fast,” said Reshan Kurukulasuriya, COO of Richard Pieris Securities Ltd. Shares in DFCC Bank Plc, which led the overall fall, lost 1.75% to Rs. 225. Shares in top mobile phone operator Dialog Axiata Plc, which reported a 15.6% jump in third quarter net profit on Wednesday, fell 0.8% to Rs. 12.40. Foreign investors bought a net Rs. 309.9 million ($ 2.37 million) worth of shares, extending the net foreign inflow so far this year to Rs. 15.88 billion, exchange data showed. Monday’s turnover was Rs. 1.88 billion, more than this year’s daily average of Rs. 1.40 billion. Analysts expect trading to be choppy in the near-term due to the revised presidential poll schedule in January and a possible bottoming out of interest rates. The country’s Central Bank has kept key policy rates steady for a ninth straight month, saying private sector credit growth was picking up and long-term lending rates were adjusting downwards.