Stock market closes at 5-month high; turnover soars to Rs. 3.6 b

Reuters: Shares gained more than 0.7% in high turnover on Wednesday, closing at their five-month peak, as expectations of strong corporate earnings and political stability after the 17 August Parliamentary polls lifted investor sentiment.

Turnover rose to Rs. 3.65 billion ($27.32 million), its highest since 14 May and well above this year’s daily average of Rs. 1.09 billion, on block deals.

The main stock index ended firmer 0.73%, or 52.90 points, at 7,313.97, its highest since 26 February.

“Trading was dominated by heavyweights, while block deals pushed the turnover higher,” said Dimantha Mathew, a research manager at First Capital Equities Ltd.

“Market is very positive, especially on the earnings. We expect the market to continue the uptrend.”

Gains were led by large caps. Ceylon Tobacco Company Plc rose 2.85% after it reported a 16.6% rise in net profit for the April-June quarter, while conglomerate John Keells Holdings Plc gained 1.69%.

Dealers said block deals in Ceylinco Insurance Company Plc, which ended 0.17% weaker, boosted turnover and foreign trade.

Foreign investors, who have bought a net Rs. 1.4 billion worth of shares so far this year, were net buyers of Rs. 1.95 billion on Wednesday.

Analysts expect local companies to post strong results for the April-June quarter.

Expectations of political stability after the 17 August Parliament elections also helped sentiment, they said.