Stock market posts near 4-month closing high

Wednesday, 4 May 2016 00:52 - - {{hitsCtrl.values.hits}}

Reuters: Shares posted their highest close in nearly four months on Tuesday, led by market heavyweight John Keells Holdings Plc, while a loan agreement with the International Monetary Fund last week also boosted sentiment.

The benchmark stock index rose for the fifth straight session and ended 1.03 %, or 66.84 points, firmer at 6,583.10, its highest close since 11 January.

“Market was bullish with some buying interest coming into blue chips and mid caps. The main reason was due to the positive sentiment with the IMF announcement,” said First Capital Equities Ltd Head of Research Dimantha Mathew.

“Still some investors are waiting to see the direction,” he said, referring to the uncertainty over market interest rates.

Market interest rates had been rising until last week as the Central Bank allowed them to rise in a bid to ease the downward pressure on the rupee.

The IMF said on Friday it reached agreement with the Sri Lankan government for a $1.5 billion bailout to help the island nation avert a balance of payments crisis.

The three-year loan will require IMF board approval in June, the global lender said, and is subject to Sri Lanka implementing reforms, including streamlining the tax code and reducing a bloated deficit.

The Central Bank last week kept benchmark rates unchanged as expected while the yields on short-term government securities were also steady at a weekly auction on Wednesday.

The central bank’s measures signalled that market interest rates may not rise as was earlier expected.

Turnover was Rs. 621.5 million ($4.3 million) on Tuesday, less than this year’s daily average of around Rs. 775.8 million.

Foreign investors, who have been net sellers of Rs. 2.96 billion worth of shares so far this year, were net buyers of Rs. 29.6 million worth of equities.

John Keells Holdings shares jumped 1.74 %, while Ceylon Tobacco Company Plc rose 1.08 %.