Stock market slips on profit-taking; banks lead

Reuters: Sri Lanka’s share market closed weaker on Tuesday, ending a four-session rally as investors booked profits in financial and blue chip shares amid low volumes and turnover, dealers said. The main share index ended 1.07 per cent or 61.64 points weaker at 5,693.92, from its highest since 23 January.

Analysts said institutional investors are worried about a possible rise in interest rates, depreciation in the rupee and Sri Lanka turning down the remaining $ 800 million in disbursements remaining from a $ 2.6 billion International Monetary Fund loan.

Conglomerate John Keells Holdings PLC fell 0.14 per cent to 169.30 rupees, On Thursday it posted a 56 per cent gain in its December quarter earnings.

Shares in Commercial Bank of Ceylon fell 0.66 per cent to 104.70 rupees.

Sri Lanka’s bourse is the worst performer among Asian markets with a 6.26 per cent loss so far this year. It was 10th-best in 2011, after being on top in 2009 and 2010.

Foreign investors were net buyers of Rs. 34.3 million on Monday, extending the net foreign buying to 471.5 million rupees worth of shares so far this year, after net outflows of 19.1 billion last year.

The day’s turnover was Rs. 831 million ($ 7.30 million), lowest since 25 January and well below last year’s average of 2.3 billion. Volume was 34.3 million shares. Last year’s daily average was a record 102.7 million.

Government data released after the market closed showed that annual inflation slowed to a 26-month low of 3.8 per cent in January from a year earlier.

The rupee closed flat at 113.89/90 against the dollar for the 47th straight session since a 21 November devaluation, with the Central Bank selling more than $ 28 million to defend it, dealers said.

The bank has spent more than $1.11 billion keeping the exchange rate steady since 21 November. It spent a net $ 1.79 billion in the first 10 months of last year to keep depreciation at bay.