CSE slips from 1-week high in thin trade

Reuters: Shares ended slightly weaker on Thursday, slipping from a one-week high hit in the previous session, as investors sold diversified shares such as John Keells Holdings Plc.

Trading was thin as investors awaited for more clarity on the political and economical front.

The Colombo stock index ended 0.16% weaker at 6,473.18, slipping from its highest close since 9  May hit on Wednesday.

“The market today came down on John Keells. The market is hovering around these levels as investors are still on the sidelines,” said Dimantha Mathew, head of research, First Capital Holdings.

“There are queries from investors, but nobody is taking the initiation to invest as yet.” Turnover stood at Rs. 484.6 million ($ 3.07 million), less than half of this year’s daily average of Rs. 1 billion.

Foreign investors net sold equities worth Rs. 77.8 million, extending the year-to-date net foreign outflow to Rs. 747.3 million worth of shares.

Meanwhile, the recent fuel price hike also weighed on investor sentiment, stockbrokers said.

State-run Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on Thursday midnight in response to the hike in global oil prices. Lanka IOC, a subsidiary of Indian Oil Corp, also increased fuel prices the same day.

Shares of John Keells Holding Plc ended 0.8% weaker, while the biggest listed lender Commercial Bank of Ceylon Plc closed 0.6% lower. Shares of Lanka IOC ended 0.6% weaker.

The depreciation in rupee also weighed on the market, analysts said, as it is likely to hit profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the US currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, dented market sentiment.

Last week, Sirisena urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures.