Bourse recovers after Budget vote, but investors cautious
Wednesday, 26 November 2014 00:38
-
- {{hitsCtrl.values.hits}}
Reuters: Stocks recovered on Tuesday from the previous session’s near-four-week closing low, a day after President Mahinda Rajapaksa won the final 2015 Budget vote, contrary to speculation that he might lose it.
Analysts expect the market to be volatile due to political uncertainty before a snap presidential poll on 8 January. Rajapaksa, who is facing a split in his ruling coalition ahead of the poll, won the final vote on the 2015 Budget with a strong majority.
The main stock index, which rose 1.32% intra-day, ended 0.06% up at 7,239.36, recovering from its lowest close since 28 October, hit on Monday.
Stockbrokers said the market was volatile and late selling saw early gains being surrendered as investors were cautious due to the prevailing political uncertainty ahead of the elections.
Already, seven legislators, including Health Minister Mithripala Sirisena, the main Opposition candidate, have defected from Rajapaksa’s ruling coalition.
Stockbrokers and research analysts said some investors are buying stocks quietly. They said fears of a possible change in the political leadership could be highly volatile to the market, while some investors still remain optimistic about the change.
Continued foreign buying, low interest rates and hopes of better earnings pushed the bourse into the overbought zone by 18 November, before it slipped on political woes. The Bourse is in the oversold region since Friday, Thomson Reuters data showed.
Tuesday’s turnover was Rs. 1.08 billion ($ 8.24 million), exchange data showed, less than this year’s daily average of Rs. 1.44 billion. Foreign investors were net buyers of Rs. 5.2 million, extending foreign buying for this year to Rs. 19.4 billion, exchange data showed.
Shares in Hatton National Bank Plc rose 1.55%, leading the overall gain.
