Stocks hit over 3-year closing high; commercial banks lead

Friday, 5 September 2014 00:31 -     - {{hitsCtrl.values.hits}}

Reuters: Stocks hit their highest closing in more than three years on Thursday, led by Commercial Bank of Ceylon Plc and Nestlé Lanka Plc. Analysts said low interest rates and continued foreign buying into risky assets boosted sentiment. The main stock index rose 0.19%, or 13.50 points, to close at 7,060.60, its highest close since 14 June 2011. “Buying interest was seen in big-cap counters with continued foreign purchase,” said Dimantha Mathew, Manager, Research at First Capital Equities Ltd. “Net foreign inflow will provide sufficient cushion for the index to stay above the 7,000 mark.” The index has gained nearly 19.41% so far this year. The Bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 76.928 on Thursday, Thomson Reuters data showed. Stocks are deemed “overbought” above the 70-mark, which tends to signal a reversal in the near term. Commercial Bank of Ceylon, the country’s biggest listed lender by market capitalisation, led gains with a rise of 0.67% at Rs. 151, while Nestlé Lanka rose 1.21% to Rs. 2,090. John Keells Holdings Plc rose 0.16% to Rs. 249.90. After market hours on Wednesday, Fitch Ratings downgraded John Keells’ National Long-Term Rating to ‘AA+(lka)’ from ‘AAA(lka)’. Exchange turnover was Rs. 1.63 billion ($12.52 million), more than this year’s daily average of Rs. 1.2 billion. Foreign investors were net buyers of Rs. 405.2 million worth of shares, extending the year-to-date net foreign inflows to Rs. 8.95 billion. The Central Bank did not offer 91-day T-bills at the weekly auction on Wednesday after it rejected all bids in the last two auctions, while yields on the 182-day and the 364-day Treasury bills held steady for the third time.