Stocks down on economic worry; rupee edges up

Friday, 1 June 2012 02:37 - - {{hitsCtrl.values.hits}}

Thin trade with bearish sentiment
Foreign investors net buyers of stocks worth Rs. 43 m
Rupee firmer on dollar sales by a state bank - dealers

Reuters: Sri Lanka’s stock market fell 0.7 percent on Thursday as cautious investors sold shares in thin volume on concern over a possible fall in earnings due to a rising trend in interest rates and uncertainty over the rupee currency.

The main index fell 0.68 percent, or 32.97 points, to 4,832.15. On Wednesday, it gained for the first time in eight straight session with an 0.8 percent rise on bargain hunting.

“Investors are staying on the sidelines with some retail selling on poor sentiment. The macroeconomic situation does not look good,” said a stockbroker, speaking on condition of anonymity.

The bourse lost 7.8 percent in seven consecutive sessions through to Wednesday, as retail investors unloaded their stakes because of concern about new regulatory measures, uncertainty over the rupee , rising interest rates, and slowing economic growth amid margin selling.

Last week, the Securities and Exchange Commission (SEC) issued a rule barring brokers from selling shares for six months from the day of buying, and that triggered selling.

But foreign investors were net buyers of 43.6 million rupees ($329,300) worth of shares on Thursday, which analysts attributed to a weaker rupee, extending total net inflows into the stock market to 22.6 billion this year. Turnover was 348.8 million rupees.

The market is one of the worst performers in Asia, having fallen 20.45 percent since the beginning of the year.

The rupee edge up to 131.80/132.20 against the dollar from Wednesday’s close of 132.40/60 as a state bank sold dollars, dealers said.

The central bank said it still believed the battered rupee would stabilise at levels stronger than 125 to the dollar.