Shares end at two-week high on bargain-hunting

Reuters: Sri Lankan shares rose for a second straight session on Thursday and closed at their highest level in two weeks as local investors bought beaten-down stocks.

The benchmark share index ended 0.78% firmer at 6,068.17, its highest close since 2 March.

However, foreign investors sold Rs. 614.9 million ($4.24 million) worth of shares on Thursday, the highest outflow since 19 February, amid concerns over a higher budget deficit and economic growth. Offshore investors have dumped Rs. 1.27 billion worth of shares so far this year.

“Despite the negative outlook, it seems that a part of the recovery is driven by new investors who have entered the market,” said Softlogic Stockbrokers research head Danushka Samarasinghe.

Sri Lanka’s economy is expected to grow 5.3% in 2016, data from the state statistics office showed, but analysts say tight monetary and fiscal policies may curb its growth.

The $82.2 billion economy expanded at a sluggish 2.5% in the December quarter, down from an upwardly revised 5.6% in the previous quarter.

Analysts and economists worry slower growth could reduce corporate earnings of some listed firms.

Turnover stood at Rs. 1.49 billion ($10.3 million), more than double this year’s daily average of Rs. 791.6 million.

Shares in Sri Lanka Telecom Plc jumped 3.54% while John Keells Hotels Plc gained 4.27% and Nestle Lanka Plc rose 0.47%.