Stock market dips on profit-taking

Wednesday, 18 May 2016 00:06 - - {{hitsCtrl.values.hits}}

Reuters: Shares edged down on Tuesday from its highest close in more than four months hit in the previous session, on profit-taking led by John Keells Holdings Plc as investors cautiously awaited March quarter earnings.

Analysts also said investors were concerned that the government's move to increase the value added tax and impose new taxes, effective 2 May, would hit the bottom line of many companies.

The benchmark stock index ended down 0.56%, or 37.61 points, at 6,670.79, slipping from its highest close since Jan. 8 hit on Monday.

"There was lack of retail investor participation as all are waiting for March quarter for directions," said Acuity Stockbrokers COO Prashan Fernando.

Shares of conglomerate John Keells Holdings Plc fell 1.34%, while biggest listed Lender Commercial bank of Ceylon Plc lost 2.03% and Ceylon Tobacco Company Plc declined 2.58%.

Turnover was Rs. 710.7 million ($4.86 million), less than this year's daily average of around Rs. 784 million.

Foreign investors were net sellers of Rs. 3.93 billion worth of shares so far this year, but they net bought Rs. 47.6 million worth of shares on Tuesday.

The 14-day relative strength index, which is in an overbought region, stood at 75.128 on Tuesday, compared with Monday's 83.127, according to Thomson Reuters data. A level of 70 and above indicates the market is overbought.