Shares up from near 2-week low ahead of CB policy

Reuters: Shares edged up on Tuesday from its near two-week low hit in the previous session, as investors turned cautious, ahead of an imminent loan deal with the International Monetary Fund, and while awaiting cues from the Central Bank on interest rates.

The Central Bank’s April monetary policy announcement is scheduled for later on Tuesday, and expectations are that the bank would keep key interest rates steady, a Reuters poll showed.

However, a surprise hike is not ruled out as five of 11 analysts expect the Central Bank to raise the policy rate and keep Government borrowing in check through tighter financing conditions.

The Central Bank has tightened rates twice since December to ease the pressure on a fragile rupee.

The benchmark stock index ended up 0.4%, or 25.76 points, at 6,405.29. “A sudden retail buying which came in the latter part of the day put some upward pressure on the market. We do not think it can sustain with the high interest rates and also the poor economic conditions,” said Dimantha Mathew, Head of Research, First Capital Equities Ltd. A visiting IMF mission said it expected to complete negotiations with Sri Lanka for a three-year loan program in the next two weeks.

Foreign investors were net buyers of Rs. 96.8 million ($665,063.55) worth of equities on Tuesday, but have been net sellers of Rs. 2.95 billion so far this year.

Turnover stood at Rs. 540.7 million, less than this year’s daily average of around Rs. 776.3 million.

Shares in conglomerate John Keells Holdings Plc rose 1.84%.