Bourse gains to 2-week closing high

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Reuters: Sri Lankan shares ended firmer at a near two-week high on Thursday, a day after the U.S. Federal Reserve raised interest rates by 25 basis points, the first in almost a decade.

World stock markets jumped on Thursday as investors chose to take the first hike in U.S. interest rates since 2006 as a mark oaf confidence in the world’s largest economy, also lifting the dollar but piling on the pain for oil prices.

The main stock index ended 0.39% firmer at 6,859.99, its highest since 4 December. It hit a more than eight-month closing low on Monday.

Stockbrokers said the Fed rate hike could increase the cost of funds locally as well.

“Already we have seen some foreign inflow and the Fed decision was already factored in,”Softlogic Stockbrokers’ Research head Danushka Samarasinghe said.

“But there could be outflow from the bond market, which in turn puts pressure on the rupee,” he said.

Foreign investors sold a net Rs. 44.5 million ($310,320) worth of equities on Thursday, extending the net outflow to 4.07 billion rupees so far this year.

Turnover stood at 577.2 million rupees ($4.03 million), around half of this year’s daily average of 1.1 billion rupees.

The market is expected to be lacklustre with low turnover due to year-end holidays starting next week, stockbrokers said.

Shares in Bukit Darah gained 6%, while large fixed-line phone operator Sri Lanka Telecom gained 2.2%, helping the overall index gain.