Stock market ends at over 1-week high

Reuters: Shares ended at their highest in over a week led by market heavyweight John Keells Holdings as speculation over the country regaining a trade concession helped boost sentiment, stockbrokers said.

The market shrugged off foreign outflows in an oversold market, dealers said.

The European Commission, after close of market hours, said in a statement that it has proposed increased market access for Sri Lanka as a reform incentive.

The Colombo stock index ended 0.52% up at 6,184.54, its highest close since 2 January.

“The market was in oversold region and investors have been waiting for an opportune moment. The news of Sri Lanka regaining the EU trade concession also helped sentiment,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

The 6-7% concession earlier offered by the Generalised Scheme of Preferences (GSP) Plus had brought substantial benefits to the garment industry, Sri Lanka’s second biggest foreign exchange earner after remittances.

Sri Lanka lost the EU concession in 2010 after then-president Mahinda Rajapaksa rejected demands from the international community to address human rights abuses allegedly committed during a 2009 offensive to crush a Tamil insurgency.

The day’s turnover stood at Rs. 1.12 billion ($ 7.48 million).

Foreign investors sold a net Rs. 903.4 million worth of equities on Wednesday, extending the year-to-date foreign outflows to Rs. 1.7 billion.

John Keells Holdings, which accounted for around 80% of the day’s turnover, closed 1% higher.