Stock market dips on profit-taking

Reuters: Shares ended weaker on Wednesday as investors sold blue chips such as Ceylon Tobacco Co, but foreign investors’ appetite for risky assets limited the downslide.

The Colombo Stock Index ended 0.4% weaker at 6,502.96.

Turnover stood at Rs. 376 million ($ 2.45 million) on Wednesday, well below last year’s daily average of Rs. 915.3 million. Foreign investors, which accounted for more than 65% of the day’s buying, net bought shares worth Rs. 18.2 million on Wednesday, extending the net foreign inflow in this year to Rs. 2.23 billion. They had net bought Rs. 18.5 billion worth equities in 2017 and Rs. 633.5 million in 2016. “Market is consolidating with some profit-taking,” said Dimantha Mathew, head of research, First Capital Holdings.

“We don’t see a big run at the moment. It won’t come down drastically but the market will consolidate at these levels before the next move.”

Analysts expect the market to settle at 6,600 levels.

Ceylon Tobacco Company Plc ended 3.3% down, while Hatton National Bank Plc closed 0.8% lower.

Treasury bill rates fell between March and December last year, mainly driven by foreign buying in treasury bonds, resulting in a decline in interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5%, against an anticipated four-year low of less than 4% last year, central bank governor Indrajit Coomaraswamy said last week.