Bourse rebounds on foreign buying, hopes of falling interest rate

Tuesday, 11 June 2013 00:02 - - {{hitsCtrl.values.hits}}

REUTERS: Sri Lankan shares recovered on Monday from a three-week closing low hit in the previous session, gaining for the first time in six sessions on foreign buying in blue chips and hopes of interest rates falling further after the central bank comments.

“Expectations of market interest rates falling further boosted sentiment,” a stockbroker stated on condition of anonymity. “We expect the market lending rates to fall from this week despite the central bank holding the rates flat.” The Central Bank head on Friday said the monetary authority is to issue guidelines to direct banks to cut lending rates and narrow the gap with the inflation rate, after it kept the key policy rates unchanged.

The main stock index rose 0.54%, or 33.85 points, to 6,341.28, edging up from its lowest close since 16 May.

Foreign investors were net buyers of shares for a 22nd straight session. The bourse saw a net foreign inflow of Rs. 357.6 million ($2.83 million), extending the year-to-date inflows to Rs. 15.96 billion.

They accounted for around 56.92% of the day’s turnover of Rs. 825.9 million, less than this year’s daily average of Rs. 1.04 billion.

Shares in conglomerate John Keells Holdings rose 2.94% to Rs. 272.80.

The rupee ended weaker at Rs. 126.55/60 per dollar from Friday’s close of Rs. 126.45/50 on demand for greenbacks from importers, dealers said.