Stock market hit more than 1-week closing high; blue chips gain

Tuesday, 14 February 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares hit a more than one week closing high on Monday as investors picked up battered blue chips such as John Keells Holdings Plc and Dialog Axiata Plc, brokers said.

The Colombo stock index ended 0.73% firmer at 6,138.73, its highest close since 2 February.

The index hit its lowest closing level since March on 6 February.

“Bargain hunting in blue chips drove the market, but rest of the market, retailers and high net-worth investors are on the sidelines,” said Dimantha Mathew, head of research at First Capital Equities Ltd.

“The only positive news we heard is the Fitch rating revision, but still investors are waiting to see the direction.” On Thursday, Fitch Ratings affirmed Sri Lanka’s Long-Term Foreign- and Local Currency Issuer Default Ratings (IDR) at ‘B+’ and revised the outlook to ‘stable’ from ‘negative’.

Shares of John Keells Holdings Plc rose 1.64 percent, while Dialog Axiata Plc jumped 3.77% and the biggest listed lender, Commercial Bank of Ceylon Plc climbed 1.36%.

Turnover stood at Rs. 785.1 million ($ 5.21 million), more than this year’s daily average of Rs. 625.8 million.

Foreign investors net bought Rs. 332.6 million worth of equities on Monday. They have net sold Rs. 371.2 million worth of shares so far this year.

Sri Lankan stocks have been hit by political uncertainty arising from a decision of the ruling coalition parties to contest local polls separately, and on worries over a rise in market interest rates.

Last week, the country’s central bank kept key rates steady for a sixth straight month, but flagged possible “corrective measures” in the months ahead in a sign further tightening might be on the cards to temper inflation pressures and safeguard a fragile rupee.

Yields on treasury bills are hovering at a more than four-year high.

Sri Lanka’s stock and foreign exchange markets were closed on Friday for a Buddhist religious holiday.