Bourse retreats from near 4-year high; Sirisena policies awaited

Tuesday, 13 January 2015 01:35 - - {{hitsCtrl.values.hits}}

Reuters: The main stock index fell on Monday after climbing to a near four-year high as investors took profits amid uncertainty around new President Maithripala Sirisena’s economic policies. The main stock index rose 0.9% to 7,670.98, its highest since March 2011, before reversing the climb and closing down 0.51%, or 39.09 points, at 7,566.70. The index hit its highest close since March 2011 on Friday. There was some profit-taking and investors were waiting for direction due to the political uncertainty, said Dimantha Mathew, Manager Research, at First Capital Equities Ltd. Construction firm Access Engineering fell 9.6%. Dealers said there was speculation it may not get lucrative contracts under the new Government. Former President Mahinda Rajapaksa lost his bid for a third term on Friday, ending a decade of rule that critics say had become increasingly authoritarian and marred by nepotism and corruption. After the election, leader of the pro-business opposition United National Party, Ranil Wickremesinghe, was appointed Prime Minister, though Rajapaksa’s coalition still has a majority in Parliament. Many of its lawmakers have pledged to back Sirisena. Sirisena’s coalition has promised a 100-day program to restore democracy and the economy before he dissolves the Parliament for a general election after 23 April. Analysts said the political uncertainty over Sirisena’s coalition could weigh on the markets until he wins a majority in the 225-member Parliament. The day’s turnover was Rs. 2.57 billion ($19.6 million), well over last year’s daily average of Rs. 1.42 billion, stock exchange data showed. Foreign investors were net buyers of Rs. 230.5 million worth of shares on Monday. They bought a net Rs. 22.07 billion worth of stocks last year.

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