Bourse edges up from 8-week low

Saturday, 13 June 2015 00:35 - - {{hitsCtrl.values.hits}}

Reuters: The stock index rose on Friday from its lowest in more than eight weeks hit in the previous session, led by local buying in market heavyweight John Keells Holdings Plc.

Foreign investors, however, sold Keells’ shares amid political uncertainty that has sapped investor confidence and turned them away from risky assets.

The market saw net foreign outflow of Rs. 865.1 million ($6.46 million), its worst since 30 September 2014, extending net foreign outflow from equities to Rs. 2.39 billion during the past 13 sessions. The Bourse, however, has seen net inflows of Rs. 3.54 billion into equities so far this year.

Analysts said foreign investors have been selling shares amid expectations the US would hike key interest rates sooner than expected. An upbeat US nonfarm payrolls in May, the largest gain since December, has raised chances of a rate hike as early as September.

The main stock index ended 0.14% higher, or 9.76 points, at 7,061.28, edging up from its lowest closing level since 15 April hit on Thursday. The index snapped a four- session straight losing streak on Friday.

“Today, there was some buying interest while the block deals in Keells pushed the turnover,” said Dimantha Mathew, Research Manager at First Capital Equities Ltd.

“Not much selling pressure was there today and the pressure will fade away with the announcement of elections.”

President Maithripala Sirisena’s Government has said it would dissolve Parliament once some crucial reforms, including an electoral bill, are passed, but has yet to fix a date for the election.

Friday’s turnover was Rs. 1.59 billion ($11.87 million), its highest since 20 May and more than this year’s daily average of about Rs. 1.1 billion.

Shares in conglomerate John Keells Holdings Plc, which saw net foreign selling of three million shares, ended 1.94% higher while Hayleys Plc rose 6.06%.