Stock market snaps nine sessions of falls on bargain hunting

Saturday, 2 July 2016 00:29 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan shares rose for the first time in 10 sessions on Friday as investors bought beaten-down equities.

The benchmark Colombo stock index ended 0.06% firmer at 6,287.09, after shedding 2.83% in the nine sessions through Thursday. It lost 1.3% this week, its third straight weekly fall.

“We saw some bargain hunting in the market. It’s a fresh month and investors were on the buying side after the margin covering at the end of the month,” said a stockbroker asking not to be identified.

“The market is not very strong, not very week either. It is holding on.”

The stock index hit a near five-month low on Thursday, as comments from a minister earlier this week on the imposition of capital gains tax on equities, continued to dampen sentiment which was already hit by high interest rates and policy uncertainty.

Sri Lanka will impose a capital gains tax on profits from equities, a senior government minister said late on Monday, as the Government tries to shore up its finances to meet conditions for an IMF loan.

Turnover stood at 707.2 million rupees ($4.85 million), less than this year’s daily average of 740.2 million rupees.

Global uncertainty after Britain’s vote to leave the European Union also weighed on the market with continued foreign selling.

Overseas funds offloaded shares worth a net 128.7 million rupees on Friday, extending the year-to-date net foreign outflow to 6.25 billion rupees worth of equities.

Shares of Sri Lanka Telecom PLC rose 0.53%, while Dialog Axiata PLC gained 1.92%.