Bottomed Out or SEC change talk? Market opens week on the up

Tuesday, 25 October 2011 02:05 - - {{hitsCtrl.values.hits}}

By Dinali Goonewardene

The indices on the Colombo stock market rose on thin volumes following on from the upward movement on Friday, which ended an eight-day losing streak.

The market as predicted according to technical analysis bottomed out as the All Share Price Index reached 6,250, which was a major support level, brokers said.

The All Share price Index rose 1.06% to 6,424.36 while the more liquid Milanka Price Index gained 1.03% to 5,733.76 on turnover of Rs. 949.4 million.

Net foreign outflows were Rs. 10.5 million. Renewed confidence was seen today as the indices shot up steeply. Though buying interest was witnessed across the board the transaction volumes were thin therefore turnover remained below Rs. 1 billion, NDB Stockbrokers said in its daily report.

HVA Foods Plc contributed Rs. 200.7 million to turnover and closed up Rs. 5.40 at Rs. 46.90. Seylan Bank Plc contributed Rs. 116.7 million and Colombo Land & Development Plc contributed Rs. 60.3 million to turnover respectively.

Seylan Bank closed up Rs. 10.30 at Rs. 72.90 while Colombo Land gained Rs. 1.80 to close at Rs. 59.70.

The bourse has fallen 7.4 per cent this month through Thursday, Reuters said. It gained to Asia’s fourth-best performer with a year-to-date loss of 3.19 per cent after being on the top for most of 2011.

The bourse witnessed a net foreign outflow of Rs. 10.6 million on Monday and thus far in 2011, offshore investors have sold 17.1 billion and a record 26.4 billion in 2010.

Gainers outperformed losers by 178 to 39 on Monday, Thomson Reuters data showed.

The market is expected to rally from now on as high margin debtors have already been force sold, brokers said. Rumours that directives which have been given by the SEC may be removed created optimism, they said.