Bourse rebounds on foreign buying; blue chips gain

Reuters: Shares rose on Tuesday as foreign investors bought blue chips, with the market seeing overseas fund inflows for 18 consecutive sessions.

Foreign investors net bought shares worth Rs. 172.8 million on Tuesday. They have bought equities worth a net Rs. 5.4 billion ($ 35.57 million) in 18 straight sessions, taking the year-to-date net foreign inflow into equities to Rs. 7.9 billion. The Colombo stock index ended 0.5% firmer at 6,382.37 after falling on Monday for the first time in 12 sessions on profit taking.

The index had climbed 7.2% over 11 sessions up to Wednesday. The market was closed for Sri Lanka’s traditional New Year holidays on Thursday and Friday.

“Foreign buying is very strong at the moment which is a very good sign. Foreigners are bullish,” said Dimantha Mathew, head of research, First Capital Equities Ltd.

“We expect short-term profit taking, but the market will gain after some strong inflows from sovereign bond (as it will lend support to the rupee).”

Sri Lankan authorities are in the process of raising up to $ 1.5 billion through sovereign bonds in the near future.

Turnover stood at Rs. 836.1 million, more than this year’s daily average of Rs. 775.6 million.

Shares in top mobile phone operator Dialog Axiata gained 2.7%, while conglomerate John Keells Holdings Plc rose 1.1%.