Shares rise on retail buying; rupee at 6-week closing low

Reuters: Shares rose for a second straight session on Wednesday to hit a near seven-month high helped by retail investor buying on hopes that interest rates will ease, while the rupee closed at its lowest level in six weeks on dollar demand from importers.

The main stock index rose 0.85%, or 50.21 points, to 5,933.73, its highest close since 1 October 2012.

Shares have been rising on hopes of a fall in interest rates after Treasury Secretary Dr. P.B. Jayasundera and the Central Bank said official interest rates could ease in May and June.





“We have seen retailers coming back to the market on the hope of interest rates coming down,” said a stockbroker.

Turnover was Rs. 975.3 million ($ 7.69 million), around this year’s daily average of Rs. 961 million.

Foreign investors were net sellers for the first time in 17 sessions. They sold a net Rs. 161.5 million worth shares on Wednesday, but remained net buyers of Rs. 8.26 billion so far this year. Last year, the Bourse saw a net inflow of $ 303 million.

The rupee fell for a seventh straight session to 126.85/90 per dollar, its lowest close since 11 March, due to demand from importers for the greenback despite a State bank selling dollars, currency dealers said. The currency had ended at 126.78/85 on Tuesday.