Bourse ends 7-day rising streak; slips on profit-taking
Saturday, 12 July 2014 01:59
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Reuters: Stocks fell on Friday from the previous session’s 33-month closing high, snapping a seven session winning streak, as local investors booked profits in an overbought market, stockbrokers said.
The Bourse had gained 4.5% in seven straight sessions through Thursday and is in the overbought region since 3 July, fuelled by lower interest rates and continued foreign buying.
The main stock index fell 0.11%, or 7.46 points, to 6,661.40, slipping from its highest close since 10 Octcober 2011.
“There was a bit of profit-taking. The market is little overbought but it will recover next week,” a stockbroker said on condition of anonymity.
Foreign investors, however, were net buyers of Rs. 100.9 million worth of shares on Friday, extending the foreign inflows to Rs. 9.39 billion worth of shares so far this year.
Analysts see room for gain with a P/E ratio of around 14.5 and resistance level at 7,000.
The fall was led by Commercial Bank of Ceylon PLC, which was down 1.48% to Rs. 146.30 a share. Carsons Cumberbatch PLC fell 2.33% to Rs. 420.
Lower interest rates have prompted local investors to buy shares and shift their savings from unattractive fixed assets, analysts said, as yields on Treasury bills edged down further at a weekly auction on Wednesday.
Turnover was Rs. 1.67 billion ($ 12.83 million), well above this year’s daily average of around Rs. 1.09 billion.
Analysts said foreigners have been buying risky assets because they see value in them, while falling yields in fixed assets gradually prompt local investors to shift to equities.
The market has been on a rising trend since late February due to continued foreign buying and lower interest rates.
