Thursday, 14 August 2014 00:36
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Reuters: Stocks rose on Wednesday to end at a near three-year closing high as falling interest rates left investors with few options but to invest in risky assets despite foreign outflows.
Stockbrokers, however, expect a correction during the week, as the market is overbought with the index gaining for seven straight sessions.
The main stock index, closed 0.09%, or 6.24 points firmer at 6,954.14, its highest close since 12 September 2011. It has risen 17.6% so far this year.
Turnover was Rs. 1.82 billion ($14 million), much more than this year’s daily average of Rs. 1.12 billion.
“The market is struggling simply because it is near its psychological barrier of 7,000,” said Dimantha Mathew, Manager, Research at First Capital Equities Ltd.
“We are expecting bit of a correction on some high net worth and blue-chip shares which are overvalued but the rest of the market is positive.”
Analysts said hopes of a policy rate cut on Friday and a further fall in interest rates helped boost turnover. Yields in Government Treasury bills fell 9-14 basis points at a weekly auction on Wednesday.
Better corporate earnings and continued foreign buying too have helped maintain positive sentiment.
Foreign investors were net sellers for the first time in nine sessions. They sold a net Rs. 70 million worth of shares on Wednesday. But foreigners have been net buyers of Rs. 12.22 billion worth of shares so far this year.
Nestle Lanka Plc, which led the overall index’s gain, rose 4.63%, while Sri Lanka Telecom Plc gained 1.09%.
Commercial Bank of Ceylon Plc, the country’s biggest listed lender, rose 0.56% to Rs. 143.70.
