Stock market hits more than 10-week closing high; Keells up on foreign buying

Reuters:  Shares closed at a more than 10-week high in brisk trade on Wednesday as heavy buying by foreign investors in index heavyweight John Keells Holdings buoyed sentiment across the board.

The benchmark Colombo stock index ended 0.52% higher, or up 33.64 points at 6,543.75, its highest close since 31 May.

“Foreign interest in John Keells boosted sentiment,” said Acuity Stockbrokers COO Prashan Fernando.

John Keells Holdings jumped as much as 3.15% intraday as foreign investors net bought around 720,000 shares, before closing 2.1% higher.

Shares have risen on hopes economic fundamentals would improve after the central bank on 28 July raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth.

Foreign investors net bought Rs. 100.4 million ($690,034) worth of shares on Wednesday, extending the net foreign inflow to Rs. 1.35 billion worth of equities in the last 11 sessions.

Foreign investors have so far net sold Rs. 3.46 billion worth of shares this year.

Turnover stood at Rs. 751.6 million ($5.16 million), slightly higher than this year’s daily average of around Rs. 733.1 million.

Among other gainers, Ceylon Tobacco Company Plc rose 1.62%.

Analysts said investors also shrugged off a Supreme Court order asking parliament to stop considering a bill to raise the value-added tax as the draft had not followed due process.

The move could put in jeopardy the government’s ambitious fiscal consolidation plan to reduce the budget deficit to 5.4% of gross domestic product from last year’s 7.4%.