Bourse slips from 1-week high; election woes weigh

Friday, 12 December 2014 04:25 - - {{hitsCtrl.values.hits}}

Reuters: Stocks ended weaker on Thursday from a one-week high hit in the previous session, led lower by financial shares as investors remained cautious ahead of the 8 January presidential poll. The main stock index ended 0.15%, or 10.94 points lower at 7,243.34, edging down from its highest close since 3 December, hit on Wednesday. Foreign investors were net buyers for the first time in three sessions on Thursday. They bought a net Rs. 254.5 million ($ 1.94 million) worth of shares, extending their net buying of stocks so far this year to Rs. 21.9 billion, exchange data showed. Turnover was Rs. 740.9 million ($ 5.66 million) on Thursday, according to stock exchange data, well below this year’s daily average of Rs. 1.43 billion. “The turnover is low because investors are just watchful ahead of the election. Investors want to see stability and consistency,” a stockbroker said on condition of anonymity. Analysts said many investors were staying away ahead of the elections and the festive season. Ceylinco Insurance Plc, which led the fall in the overall index, closed 2.26% weaker. Analysts expect volatility to continue and the overall index to remain flat until the elections, with speculation over more defections and likely violence ahead of the polls also weighing on sentiment. Nineteen candidates, including President Mahinda Rajapaksa and former Health Minister Maithripala Sirisena, the consensus candidate of a united opposition, on Monday submitted their nominations for the polls. So far 11 loyalists from Rajapaksa’s United People’s Freedom Alliance, including Sirisena, have defected after he announced snap elections last month, while two Opposition legislators have joined the ruling party. Speculation over more possible defections also weighed on sentiment, analysts said. Rajapaksa’s third-term re-election, which was seen as easy earlier, has suddenly become a challenge after Sirisena announced his candidature. Both the main candidates are yet to announce their policies.

Rupee forwards end steady; gains seen ahead

Reuters: Rupee forwards closed steady on Thursday as mild importer dollar demand was offset by greenback selling by exporters and inflows from inward remittances, in dull trade. The currency is expected to gain due to falls in seasonal imports and inflows from remittances ahead of the Christmas and New Year, dealers said. The four-day forwards or spot-next-next, which were actively traded, closed at 131.96/132.00 per dollar, little changed from Wednesday’s close of 131.95/132.00. The spot currency and three-day forwards, or spot-next, were not traded after the Central Bank capped the currency at predetermined levels to prevent volatility, traders said. Central Bank officials were not available for comments. Dealers said they expect the rupee to strengthen from the next week onwards through to the year end. Overseas investors sold a net Rs. 1.55 billion worth of Government securities during the week ended 3 December, the first outflow in three weeks. They sold a net Rs. 40.2 billion ($306.64 million) worth in the 10 weeks through 3 December, data from the Central Bank showed.