Bourse ends steady despite foreign selling

Reuters: Shares ended steady near a two-week low on Thursday as local buying offset foreign selling in blue-chips.

Stockbrokers, however, said that most investors have been cautiously optimistic in a lower interest rate environment as concerns about political stability and the timing of a Parliamentary election weigh on sentiment.

The main stock index ended a tad firmer, up 0.03% to 7,255.71, and near its lowest close since 14 May hit in the previous session.

Foreign investors sold a net Rs. 451.3 million ($3.4 million) worth of shares on Thursday, extending foreign outflows to 1.13 billion in the last three sessions. But the Bourse has seen net inflows of Rs. 4.63 billion in equities so far this year.

Turnover was Rs. 1.38 billion, beating this year’s daily average of about Rs. 1.14 billion.

Among the gainers, Distilleries Company of Sri Lanka Plc rose 2.87%, while Bukit Darah Plc added 1.2%.

Political uncertainty due to the Ranil Wickremesinghe-led Government not having a majority has been a drag on the market, though the trend reversed after the Central Bank cut key monetary policy rates to record lows on 15 April.

The index has gained 5.2% since the rate cut.

Analysts say a new stable Government after the election coupled with strong economic measures would boost confidence.