Tuesday, 7 January 2014 00:43
Reuters: Stocks fell on Monday, snapping six straight sessions of gains, despite foreigners buying risky assets from an over-bought Bourse.
The main stock index slipped 0.48% or 28.81 points to 5,944.99. It had touched an 11-week closing high of 6,007.79 on Friday, gaining 1.65% last week.
“It is a slow start. People are still getting in with not much of activity,” a stockbroker said on condition of anonymity.
However, stockbrokers said, there has been demand for select stocks, but they were not available in required quantity. They expect the market to gain in high turnover due to reduction in the market interest rate.
The Central Bank slashed the standing lending facility rate or reverse repurchase rate by 50 basis points to a multi-year low of 8.00% on Thursday, in a move to reduce commercial banks’ interest rate spreads.
The day’s turnover was Rs. 462.2 million, less than last year’s daily average of about Rs. 828.4 million.
Shares in Ceylon Tobacco Company PLC fell 0.16% to Rs. 1,186.30 while conglomerate John Keells Holdings fell 0.61% to Rs. 227.50 a share.
The index’s 14-day relative strength index, which was in an over-bought region, fell to neutral territory, Thomson Reuters data showed.
The index gained 4.8% in 2013 after losses in the previous two years, giving a return of 2.18% in dollar terms. Many investors locked their funds in risk-free debentures instead of risky assets due to a sluggish bourse amid falling interest rates.
Foreign investors bought Rs. 70.6 million ($540,200)worth of shares on Monday after buying a net Rs. 22.88 billion worth of stocks last year, compared with a record Rs. 38.68 billion net foreign inflow in 2011.