Bourse slips from two-month high on selloff, foreign outflows

Thursday, 7 May 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares slipped on Wednesday from their two-month highs hit in the previous session as investors sold select illiquid shares and foreign investors exited from risky assets, while turnover hit a six-week high on local buying. The main stock index fell 0.14% to close at 7,192.29, slipping from its highest closing level since 4 March hit on Tuesday. It gained 4.36% through Tuesday since the Central Bank cut key rates on 15 April, while yields on T-Bills have fallen 44-57 basis points since then. “The market is down on large-cap illiquid shares, but we saw local participation is getting stronger. The confidence is slowly picking up with interest rates coming down,” said a stockbroker asking not to be named. Net foreign outflow from equities on Wednesday was Rs. 516.7 million ($ 3.9 million), extending net outflows of Rs. 610.4 million for the past three days. Foreign investors, however, have bought a net Rs. 3.2 billion worth of shares so far this year. Turnover stood at Rs. 1.68 billion, the highest since 25 March and well above this year’s daily average of around Rs. 1.07 billion. Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in wait-and-watch mode before the Parliamentary elections. Parliament passed reforms last week to reduce some of the president’s powers, although they were far fewer than President Maithripala Sirisena had promised. Shares of Commercial Leasing and Finance Plc fell 6.67%, while Chevron Lubricants Lanka Plc fell 2.01%. Large-cap Ceylon Tobacco Co Plc fell 0.50%.

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