Poson lights up Bourse, rupee

Saturday, 2 June 2012 00:11 - - {{hitsCtrl.values.hits}}

Reuters: The stock market rose more than one per cent on Friday with retail and foreign investors buying shares in thin volumes in an overall skittish market concerned about a weak Sri Lankan Rupee and the outlook for interest rates.

The main index gained 1.1 per cent, or 53.03 points, to 4,885.18, its highest since 28 May.

“There was bargain hunting and we saw buying creeping in with the start of the fresh month,” said a stockbroker, speaking on condition of anonymity.

Yields in Sri Lanka’s 364-day and 91-day T-bills have risen 330 basis points and 233 basis points since the Central Bank raised policy rates for the first time since 2007 on 3 February.

Last week, the Securities and Exchange Commission (SEC) issued a rule barring brokers from selling shares for six months from the day of buying, and that triggered selling.

But foreign investors were net buyers of Rs. 94.4 million ($ 715,200) worth of shares on Friday, which analysts attributed to a weaker rupee, extending total net inflows into the stock market to 22.6 billion this year. Turnover was Rs. 313.1 million. The rupee strengthened to 131.00/20 against the dollar from Thursday’s close of 132.80/132.20 on dollar sales by two private commercial banks after a state lender sold less than a million dollars at 132, dealers said. The Central Bank on Thursday said it still believed the rupee would stabilise at levels stronger than 125 to the dollar.