Bourse slips from near six-month high on profit-taking

Reuters: Shares fell on Tuesday from their highest in nearly six months as investors took profits after a four-day rally on hopes of political stability after the 17 August Parliamentary elections, brokers said.

The index had gained 6% in nearly a month through Monday as investors picked up risky assets, also on expectations of strong corporate earnings.

The main stock index ended 0.36% or 26.54 points weaker at 7,310.05, slipping from its highest close since 13 February hit on Monday.

Turnover stood at Rs. 1.55 billion ($11.6 million), well above this year’s daily average of Rs. 1.09 billion.

“The market came off with an expected profit-taking session,” Danushka Samarasinghe, Research Head at Softlogic Stockbrokers, told Reuters.

“The slide might continue for one or two days before it stabilises and then rallies again.”

Analysts said investors are expecting a strong government after the election, which has helped sentiment. The also expect local companies to post strong results for the April-June quarter.

Losses were led by large-caps, with Ceylon Tobacco Co Plc falling 1.97% and conglomerate John Keells Holdings Plc losing 1.24%.

Foreign investors, who have bought a net Rs. 700.9 million worth of shares so far this year, net sold Rs. 157.6 million in equities on Tuesday.