Stock market down on profit-taking

Reuters:  Shares ended lower on profit-taking on Thursday, snapping five days of gains and slipping from their highest level in more than seven weeks hit in the previous session, analysts said.

The bourse has been on a gaining trend on hopes that economic fundamentals would improve after the central bank’s rate hike last week.

The benchmark Colombo stock index ended down 0.51% at 6,478.25, slipping from its highest close since 14 June hit on Wednesday.

The central bank last week raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth that is adding to concerns about inflationary pressures.

“Today there was a bit of slowdown with lower interest from foreigners,” said SC Securities Ltd Head of Research Yohan Samarakkody.

“The market started to consolidate today. Market cannot go up continuously, either it should stabilise or should go up again after some kind of consolidation.”

Overseas investors were net buyers of Rs. 34.6 million ($237,800.7) worth of shares on Thursday, extending the net foreign inflow during the last seven sessions to Rs. 784.3 million worth of equities.

However, they have been net sellers of Rs. 4.02 billion worth of shares so far this year.

Stockbrokers said the market is awaiting an economic policy announcement from Prime Minister Ranil Wickremesinghe, scheduled later this month.

Turnover stood at Rs. 504.7 million ($3.47 million), less than this year’s daily average of around Rs. 733.4 million.

Shares in Ceylon Tobacco Company Plc fell 1.51% while biggest-listed lender Commercial bank of Ceylon Plc fell 1.79%, dragging the overall index down.