Shares rise on blue chips; foreign outflow hits 7-month high

Reuters: Stocks hit a one-week closing high on Thursday, led by blue chips as investors picked up beaten down counters, even as foreign investor outflow touched a seven-month high, mainly due to selling in shares of National Development Bank.

The benchmark index of the Colombo Stock Exchange ended 0.21% higher at 6,464.94, its highest close since 15 September.

"Index turned green today with sudden buying interest in blue chip counters," said Dimantha Mathew, head of research at First Capital Equities Ltd. "Buying interest is there mainly in diversified shares."

Foreign investors sold a net 6.38 million shares in National Development Bank, ahead of a change in its top management, Mathew said. NDB ended 1% higher.

Foreign outflow hit its highest since 19 February as offshore investors sold a net Rs. 867.8 million ($ 5.95 million) worth of equities on Thursday, extending the year to date net foreign outflow to Rs. 2.94 billion worth shares.

Turnover stood at Rs. 2.09 billion, more than twice this year's daily average of Rs. 752.3 million.

Shares in conglomerate John Keells Holdings Plc rose 0.9%, while Ceylon Tobacco Company Plc gained 1.3%, driving the overall index higher.

The Bourse hit a more than seven-week low on Tuesday as selling pressure on stocks that were expected to take a hit from a proposed tax increase weighed on sentiment.