Profit taking checks Bull Run

Profit taking by investors at the tail end of the trading yesterday checked the minor Bull Run in the Colombo Bourse.

Some of the heavy weight stocks gained sharply but some investors crashed whilst overall the market closed on a positive note with Rs. 4.1 billion in turnover. The traded share volume was 186.1 million against five-day average of 177.8 million. Last year’s daily average volume was 69.2 million.

Premier blue chip JKH peaked to Rs. 297 but closed at Rs. 294.60 down by Rs. 1.10 whilst number three most valuable stock SLT rode on its new glory reaching a high of Rs. 60 and closing unchanged at Rs. 56.10. Number two Carsons gained as well as Commercial Bank.

“Indices gained slightly while investors showed mixed sentiments on different counters. Buying pressure was witnessed in finance and manufacturing sectors. However, profit taking in small and mid cap counters subdued last week’s momentum,” NDB Stockbrokers said.

“The indices rose marginally amid heavy turnover levels driven by local investors,” added John Keells Stock Brokers.

Bank, Finance & Insurance and Manufacturing sectors were the highest contributors to the market turnover while indices increased by 0.85% and 0.87% respectively. Reuters said Bourse reached a new high led by retail investor buying on hopes of better earning in the December quarter. The ASPI closed 0.1 percent or 7.36 points firmer at a new record closing high of 7,261.37. It hit a new intraday all-time high of 7,320.22 pints on Monday.

It has been Asia’s best performer with a 9.43 percent gain so far in 2011 after being the top performer last year with a 96 percent return. Foreign investors were net sellers of a net 269.2 million rupees’ worth shares on Monday and they have sold a net 2.3 billion rupees so far this year after selling a record net 26.4 billion rupees in 2010.

The bourse is trading at a forward price-to-earnings (P/E) ratio of 18.1, highest among emerging markets, compared with 12.9 in Asian markets and 12 in global emerging markets, Thomson Reuters StarMine data showed. Its 14-day relative strength index is at 86.4, beyond the overbought limit of 70.    

Meanwhile the rupee closed firmer at 111.91/95 a dollar from Friday’s 111.00/03 on high dollar inflows to a foreign bank from trade related transaction, traders said.