Bourse ends week at over 3-year high on large caps, banks

Saturday, 30 August 2014 04:42 -     - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan stocks hit more than three-year high on Friday, led by large cap and banking shares as low interest rates and continued foreign buying into risky assets boosted sentiment, brokers said. The main stock index ended up 0.61%, or 42.33 points, at 7,034.09, its highest close since 16 August 2011. Up to Friday’s close, the index had gained 18.96% this year. “With low interest rates and low inflation the market will continue to go up despite being slightly over heated,” said a stockbroker asking not to be named. “We may see profit-taking here and there but it will continue to go up.” The bourse has been trading in an overbought region since July and on Friday the Relative Strength Index, a momentum indicator tracked by chartists, was at 74.982, Thomson Reuters data showed. Stocks are deemed ‘overbought’ above the 70-mark, which tends to signal a reversal in the near-term. Ceylon Tobacco Co Plc, which led the overall gains in the index, rose 1.37% to 1,197.20 rupees, while biggest listed lender Commercial Bank of Ceylon Plc rose 1.3% to 148 rupees. Shares in Dialog Axiata Plc rose 0.9% to 11.20 rupees. Friday’s turnover stood at 1.14 billion rupees ($ 8.76 million), slightly below this year’s daily average of 1.2 billion rupees. Foreign investors were net buyers of 101.3 million rupees worth of shares on Friday, extending the year-to-date net foreign inflow to 8.2 billion rupees. The Central Bank rejected all 91-day treasury bill bids for the second straight week at an auction, while yields on the 182-day and 364-day treasury bills held steady at a weekly auction on Wednesday.