Bourse gains on bargain hunting; rupee steady

Reuters: Sri Lanka’s stock market climbed on Wednesday in thin trade as investors cautiously bought blue chips that have lost value, while many investors held off in anticipation of possible regulatory changes.

The island nation’s main share index rose 0.67 per cent or 40.14 points to 6,028.79, from its lowest since 28 November. Retail buyers snapped up Dialog Axiata and Sampath Bank, while foreign investors bought market heavyweight John Keells Holdings.  Keells jumped 4.94 per cent to 172.10 rupees as foreign investors bought 30,308 shares, while Dialog ended 1.28 per cent firmer at Rs. 7.90 and Sampath gained 0.5 per cent to Rs. 202.

But the bourse saw a net foreign outflow of Rs. 70.9 million on Wednesday with offshore investors selling 500,200 shares in Lanka Walltile, which ended flat at Rs. 92.10. Foreign investors have sold 18.1 billion thus far in 2011, and a record 26.4 billion in 2010.

The day’s turnover was Rs. 831.2 million ($ 7.30 million), well below last year’s average of 2.4 billion and this year’s 2.4 billion. Total volume was 35.5 million shares, against a five-day average of 58.9 million. The 30-day and 90-day average trading volumes were 57.2 million and 100.6 million. Last year’s daily average was 67.9 million.

The bourse has fallen 11.13 per cent since 1 October. It is Asia’s 13th-best performer with a year-to-date loss of 9.15 per cent after being at the top until June. It gave Asia’s best returns in 2009 and 2010.

On Wednesday, the bourse was in neutral territory with the 14-day relative strength index at 39.6, above the lower neutral range of 30. Losers outnumbered gainers by 96 to 88, Thomson Reuters data showed.

The rupee closed flat at 113.89/90 rupees a dollar for an 11th straight day. The Central Bank on Wednesday sold around $ 12 million to defend the currency, dealers said, extending its total dollar sales to around $ 260 million since the three per cent devaluation on 22 November.

On Wednesday the Central Bank raised its benchmark 91-day T-bill rate by eight basis points to a 20-month high.