Stock market slips from 10-week high on profit-taking

Reuters: Shares on Thursday slipped from its more-than-10-week high, hit in the previous session, as foreign outflow dented investor sentiment while some investors booked profits in thin trade.

The benchmark Colombo stock index ended down 0.44%, 28.98 points, at 6,514.77.

“Foreign selling was seen in some large caps, and that led to profit-taking,” said Jaliya Wijeratne, CEO, First Capital Equities. Foreign investors were net sellers for the first time in 12 sessions. They have sold shares worth Rs. 13.08 million on Thursday, extending the year-to-date net foreign outflow to Rs. 3.48 billion worth of shares.

However, they have bought a net Rs. 1.35 billion worth of equities in the past 11 sessions through Wednesday.

Turnover stood at Rs. 523.6 million, less than this year’s daily average of around Rs. 731.7 million.

Shares have risen to a more-than-10-week high on Wednesday on hopes that 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.

Shares in Ceylon Cold Stores Plc slipped 1.44% while the biggest-listed lender Commercial Bank of Ceylon Plc skid 0.66%.

Analysts said investors also shrugged off a Supreme Court order asking the 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%.