Shares rise; index breaches key 6,000 mark

Saturday, 12 March 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares gained for a second straight session on Friday as investors bought beaten-down stocks, with the index touching its technical resistance level of 6,000 points.

However, foreign investors were net sellers for the first time in 10 sessions.

The benchmark share index ended 1.21% up at 6,019.95.

The index had lost 3.2% in the two sessions through Wednesday as a Government move to hike Value Added Tax (VAT) and reintroduce Capital Gains Tax to break out of a debt trap and qualify for a $1.5-billion IMF loan weighed on sentiment.

With the Central Bank’s unexpected hike in interest rates in mid-February and yields on Treasury bills at two-year highs, investors prefer fixed interest rate bearing assets over risk assets, stockbrokers said.

“Very slowly buying interest is coming in from high net worth investors and short-term investors who expect short gains,” said Dimantha Mathew, Head of Research, First Capital Equities Ltd.

“We expect the market to stabilise around 6,000 points.”

Foreign investors were net sellers for the first time in 10 sessions, selling Rs. 16.7 million ($115,371.33) worth of shares on Friday, extending the net foreign outflow so far this year to Rs. 262.8 million worth of shares.

Turnover stood at Rs. 748.1 million ($5.17 million), just below this year’s daily average of Rs. 776.5 million.

The index moved into neutral territory on Friday for the first time in the last 12 sessions after being in the oversold zone, with the 14-day relative strength index ending at 34.747 on Friday, compared with Thursday’s 25.530, Thomson Reuters data showed.

A level between 70 and 30 indicates the market is neutral.

Shares in Sri Lanka Telecom Plc rose 6.57% while biggest listed lender Commercial Bank of Ceylon Plc rose 4.10%.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.