Stock market ends flat; blue chips down

Reuters: Shares ended steady on Thursday, after it hit a near three-week closing high in the previous session, as investors sold blue chip shares such as Ceylon Tobacco Company Plc and John Keells Holdings Plc .

The benchmark Colombo stock index ended down 0.01% at 6,401.90. It gained 1.3% last week in its first weekly gain in four.

“There was profit-taking in some blue chip companies,” said First Capital Equities Ltd head of research Dimantha Mathew.

The bourse touched a near three-week high on Wednesday due to positive sentiment after Sri Lanka raised $1.5 billion in its first sale of dual-tranche eurobonds earlier this week, as over $5.5 billion in offers for the issue showed global investors were bullish about the prospects of the $82 billion economy.

After the bond deal, yields in local T-bill auction fell along with the 364-day T-bill rates at Wednesday’s auction for the first time since 15 April.

Turnover stood at Rs. 1.06 billion ($7.27 million), well above this year’s daily average of around Rs. 742.7 million. Overseas investors, who were net sellers for the first time in seven sessions, sold a net Rs. 3.2 million worth of shares, extending the year-to-date net foreign outflow to Rs. 5.08 billion worth of equities.

Shares stumbled recently and hit their lowest close since 7 April on Monday, after losing in 10 of 11 trading sessions, on worries over capital gains tax on stocks, high-interest rates and policy uncertainty.

Shares in Ceylon Tobacco Company Plc fell as much as 1.96% while conglomerate John Keells Holdings Plc dropped as much as 0.64% and Aitken Spence Plc slipped as much as 2.03%.