Bourse ends lower; post 3rd straight weekly fall

Reuters – Shares fell for a seventh straight session on Friday to their lowest closing level in more than 13 weeks, led by manufacturing and telecommunication stocks.

The Colombo stock index edged down 0.06 percent to 6,567.43, its lowest close since 3 May. The bourse fell 1.48 percent for the week, its third straight weekly fall.

The index slipped 1.6 percent in July, but has risen about 6 percent this year as of close of trade on July 31.

Shares of conglomerate John Keells Holdings PLC dropped 0.6 percent, while Dialog Axiata PLC slipped 0.9 percent and Chevron Lubricants Lanka PLC fell 2.03 percent.

“There were lower market activities, as investors are waiting to see the direction of the market,” First Capital Holdings Head of Research Dimantha Mathew said.

Foreign investors net bought shares worth Rs. 80.6 million (about $525,424) on Friday, extending their year-to-date net inflow to Rs. 26.5 billion.

Turnover stood at Rs. 405.1 million ($2.64 million), less than half this year’s daily average of around Rs. 893.3 million.

Analysts, however, expect equities to gain due to a fall in the yields of government bonds.

The Central Bank held policy rates steady on Thursday, and said tightening measures taken in the past are helping cool inflation and credit growth. Short-term treasury-bond yields fell between 41 basis points (bps) and 55 bps at a weekly auction on Wednesday.

In last week’s auction, the weighted average yield on a 59-month bond dropped by 99 bps, while that on an 118-month bond fell by 78 bps.

Stock and foreign exchange markets will remain closed on Monday for the Poya holiday.