Stocks hit one-week as bargain-hunting offsets fall

Reuters: Sri Lanka’s stock market slipped to a one-week low on Tuesday in low volume and turnover as investors held off amid negative sentiment about a credit shortage and uncertainty after the Head of the Securities and Exchange Commission (SEC) resigned.

The island nation’s main share index rose 0.43 per cent during the day on bargain hunting but closed 0.12 or 7.27 points weaker at 5,988.65, lowest since 28 November.

However, brokers said some local investors bought blue chips including market heavyweight John Keells Holdings PLC, which had fallen 10.2 per cent since 1 November.

Keells ended 1.17 per cent firmer at Rs. 164 on Tuesday, with foreign investors selling 21,466 shares.

The day’s turnover was Rs. 775.9 million ($6.81million), lowest since 23 November and well below last year’s average of 2.4 billion and this year’s 2.4 billion.

Total volume was 23.1 million shares, against a five-day average of 66.7 million. The 30-day and 90-day average trading volumes were 57.9 million and 101.9 million. Last year’s daily average was 67.9 million.

The bourse has fallen 11.72 per cent since 1 October. It is Asia’s 13th-best performer with a year-to-date loss of 9.75 per cent after being at the top until June. It gave Asia’s best returns in 2009 and 2010.

On Tuesday, the bourse was in neutral territory with the 14-day relative strength index at 39.6, above the lower neutral range of 30. Losers outnumbered gainers by 93 to 81, Thomson Reuters data showed.

The bourse saw a net foreign outflow of Rs. 34.1 million on Tuesday, for a total of 1.62 billion over the last 10 days. Thus far in 2011, offshore investors have sold 18 billion, and 26.4 billion in 2010.

The rupee closed flat at 113.89/90 rupees a dollar for the 10th straight session, dealers said.

The Central Bank on Tuesday sold around $ 20 million to defend the currency, dealers said, extending its total dollar sales to $ 250 million since the three per cent devaluation on 22 November.