Bourse dips on profit-taking in telecom shares; investors await direction

Reuters - Shares snapped two straight sessions of gains on Friday on profit-booking in telecom stocks such as Dialog Axiata PLC, while investors assessed the impact of deadly floods that hit rubber and tea plantations last week on exchange rate and inflation.

Analysts said it is too early to evaluate the real impact of the floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended 0.07 percent weaker at 6,689.07, edging down from its highest close since 26 May hit on Thursday. The bourse fell 0.13 percent during the week, recording its second straight weekly loss.

Turnover was Rs. 523.8 million ($3.43 million), less than this year’s daily average of Rs. 898.7 million.

Inflation could rise in the short term, especially due to crop damages and difficulties in distributing fresh food produce and staple food items, analysts said.

“The market wants to find a direction; one day it’s up, another day it’s down, as investors are awaiting direction,” First Capital Holdings PLC Senior Research Analyst Atchuthan Srirangan said.

Foreign investors were net buyers of Rs. 66.5 million worth of shares, extending the year-to-date net foreign inflow to Rs. 19.55 billion.

Shares of Dialog Axiata PLC fell 2.5 percent while Carson Cumberbatch PLC dropped 5.7 percent and Lanka ORIX Leasing Company PLC ended 2.7 percent weaker.