Bourse edges down to over 1-week low on financials, foreign outflows
Tuesday, 24 June 2014 00:01
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Reuters: Stocks slipped on Monday for a fourth straight session to hit a more than one-week closing low led by financials, while foreign investors offloaded shares of market heavyweight John Keells Holdings.
Analysts said the market will move sideways in the short-term with lower risk, due to lower interest rates.
The main stock index lost 0.05%, or 3.10 points, to close at 6,299.35, its lowest since 11 June. It hit a more than one-year high on Tuesday.
There was a layer of selling due to the recent ethnic violence and possible implications after a Government Spokesman said Sri Lanka bought Iran crude via third parties, said a stockbroker on condition of anonymity.
“We have seen foreign selling of Keells in the last few days. That is not a good sign for the overall market sentiment,” the broker said.
Bourse data showed foreign investors have been selling Keells for six straight sessions.
Stockbrokers said investors perceive the violence in the previous weekend that killed at least three people and left over 75 people seriously injured could hit the market and the tourism sector.
The Government Spokesman said on Thursday the country has been buying Iranian crude from various countries via third parties, and avoiding Western sanctions with the understanding of the United States. The United States denied the claim.
The Bourse saw net foreign outflows for the second straight session. Foreign investors net sold Rs. 180.1 million ($ 1.38 million) of stocks, but they have been net buyers of Rs. 5.5 billion so far this year.
Turnover was Rs. 867.3 million, less than this year’s daily average of Rs. 1 billion.
National Development Bank PLC fell 2.01% to Rs. 195, while John Keells Holdings Plc, which accounted for 21.5% of the day’s turnover, fell 0.32% to Rs. 220.
The market has been on a rising trend since late February due to continued foreign buying and lower interest rates. It fell on Wednesday after the Central Bank held the key policy rates steady, though some had expected a rate cut.
