Bourse dips from over 33-month high

Friday, 18 July 2014 00:01 -     - {{hitsCtrl.values.hits}}

Reuters: Stocks fell on Thursday from over 33-month highs hit in the previous session, ending a three-session winning streak as investors booked profits in an overbought market. The country’s share index had risen 5.71% up this month through Wednesday as the yields in risk free Treasury bills and the Central Bank’s key monetary policy rates have fallen to multi-year lows while continued foreign buying also boosted sentiment. The main stock index fell 0.31%, or 20.69 points, to 6,721.87, edging down from its highest close since 3 October 2011 hit on Wednesday. Yields in Treasury bills fell further at the Wednesday’s weekly auction. “A bit of profit-taking brought the market down. But it will continue to go up with the positive sentiment,” said a stockbroker asking not to be named. The Central Bank on Monday kept policy rates steady at multi-year lows for a sixth straight month, as expected, despite private sector credit growth slowing to a 4-1/2-year low. The index is in the overbought region since 3 July as it has gained 5.38% so far this month and 13.68 so far this year, Thomson Reuters data showed. Turnover was Rs. 926 million ($ 7.11 million), slightly below this year’s daily average of about Rs. 1.09 billion. Foreign investors were net buyers of Rs. 163.6 million worth of shares on Thursday, extending net foreign inflows in stocks to Rs. 9.95 billion so far this year. Thursday’s losses were led by Sri Lanka Telecom Plc, which lost 2.14% to Rs. 55. Shares in biggest listed lender Commercial Bank of Ceylon fell 0.42% to Rs. 141.50, while Bukit Darah Plc declined 1.43% to Rs. 690. Shares in market heavyweight John Keells Holdings, which accounted for 30% of the day’s turnover, rose 0.04% to close at Rs. 245. Lower interest rates have prompted local investors to buy shares and shift their savings from unattractive fixed assets, analysts said, as yields on Treasury bills edged down further at a weekly auction on Wednesday. Analysts said foreigners have been buying risky assets because they see value in them, while falling yields in fixed assets gradually prompt local investors to shift to equities. The market has been on a rising trend since late February due to continued foreign buying and lower interest rates.