Share index falls below key 6,000 support level

Tuesday, 15 March 2016 00:11 - - {{hitsCtrl.values.hits}}

Reuters: The share index fell on Monday, snapping a two-session gaining streak as it declined below a key support level of 6,000 points, with foreign investors exiting the island nation’s risk assets, brokers said.

The benchmark share index fell 0.67% or 40.52 points to 5,979.43.

The index had gained 2.7% in the last two sessions through Friday due to a technical rebound.

Investors preferred fixed interest rate bearing assets over shares due to a rise in the yields on Treasury bills, which are hovering at two-year highs, in tandem with the Central Bank’s unexpected interest rates hike in mid-February, dealers said.

“The economy is also fragile. Still we are at a critical stage, so there is not a lot of buying,” said Dimantha Mathew, Head of Research, First Capital Equities Ltd.

“Only high risk takers are buying. Retailers, institutions and others are still out of the market and we expect the market to trade between 5,800 and 6,000 points in short term.”

Foreign investors were net sellers for a second straight session, unwinding Rs. 155.9 million ($1.08 million) worth of shares on Monday, extending the net foreign outflow so far this year to Rs. 418.7 million worth of shares.

Turnover stood at Rs. 719.3 million, below this year’s daily average of Rs. 775.3 million.

Shares in conglomerate John Keells Holdings Plc fell 1.95%, while Hatton National Bank Plc declined 2.04%.