Stock market at near 3-month high

Thursday, 18 April 2013 01:07 - - {{hitsCtrl.values.hits}}

Reuters: Shares hit a near three-month high on Wednesday, as investors bought banks a day after the Central Bank said there would be room for further monetary policy easing, though it froze the key policy rates for April.

The Central Bank on Tuesday kept key monetary policy rates unchanged for a fourth straight month, as expected, but left the door open for easing later as inflation is expected to slow further.

The main stock index gained 0.27%, or 15.85 points, to 5,868.53, its highest close since 24 January.

“Investors are back at the banking counters after the Central Bank’s comments,” said a stockbroker, who asked not to be named.

Expectations of falling interest rates have boosted sentiment, after Treasury Secretary P.B. Jayasundera last week said Sri Lanka’s interest rates should fall in May-June as the borrowing needs of loss-making state energy companies recede.

The index has risen for the last five straight sessions since the Treasury Secretary’s comments.

The turnover was at Rs. 610.7 million ($ 4.87 million) on Wednesday, less than this year’s daily average of about Rs. 967.4 million.

Foreign investors were net buyers of Rs. 43.7 million worth of shares, extending the year-to-date net foreign inflow to Rs. 7.15 billion. Last year, the Bourse saw a net inflow of $ 303 million.

The rupee edged down to 125.60/62 to the dollar, from Tuesday’s close of 125.41/45, due to demand from importers for the greenback, currency dealers said.

The rupee has been on the rise since mid-March on inflows from remittances and exporter dollar sales ahead of the traditional New Year, which most Sri Lankans celebrated on 13 and 14 April.