Stocks nudge up amid concerns; rupee weaker

Friday, 13 July 2012 05:38 - - {{hitsCtrl.values.hits}}

Reuters: The stock market edged up on Thursday from a one-month low, but concerns over rising interest rates and exchange rate volatility trimmed the trading volume.

Colombo Stock Exchange’s main index gained 0.08% or 3.67 points up at 4,872.06, from its lowest since 13 June.

“The market is just going without a direction,” said one stockbroker, who asked not to be identified.

“If not for foreign participation, it’s a very low turnover.”

Analysts said rising interest rates had become the main investor concern.

Despite the Central Bank leaving key policy rates unchanged for the third straight month on Wednesday, yields in benchmark T-bills rose 9-14 basis points at a weekly auction to their highest since June 2009.

Some analysts expected the benchmark 364-day T-bill yield to reach 14.5% from its current 13.10%, which may result in a shift of portfolio to fixed deposits from equities.

Turnover was Rs. 336.7 million ($ 2.52 million), against this year’s daily average of Rs. 942.3 million.

Foreign investors were net sellers of Rs. 12.7 million worth of shares, though they have been net buyers of Rs. 23.7 billion so far this year.

The rupee currency ended weaker at 133.80/90 against the dollar from Wednesday’s close of 133.75/85 on importer demand for dollars, dealers said.