Stock market ends near one-year high; blue chips lead

Reuters: Shares ended marginally higher on Friday, near a one-year high, led by gains in blue chips such as Ceylon Tobacco Company Plc and conglomerate John Keells Holdings Plc.

Stockbrokers said they expect the bullish trend to continue next week with the Central Bank holding key policy rates steady amid falling T-bill yields.

With the pressure on the rupee abating and yields on government securities easing, the Central Bank kept key interest rates steady at a policy meeting on Tuesday.

The Colombo stock index ended 0.08% firmer at 6,671.98, its highest close since 18 May 2016. The index added 0.5% this week, its seventh straight weekly gain.

“The interest rate decision is a boost to the market. That was kind of a direction to say now the trend in the rising interest rate should reverse,” said Softlogic Stockbrokers Deputy CEO Hussain Gani.

Financial markets were closed on Wednesday and Thursday for Buddhist religious holidays.

Turnover stood at Rs. 651.6 million ($ 4.28 million), less than this year’s daily average of Rs. 891 million.

Foreign investors net bought shares worth Rs. 38.5 million, extending their year-to-date investment in equities to Rs. 16.81 billion.

They bought a net Rs. 14.32 billion in the last 33 sessions, out of which, foreign investors were net buyers in 32.

Reduction of 36-38 basis points in T-bill yields in the last three weeks, stable currency on expectation of inflows from foreign borrowing, and an IMF statement on the disbursement of the third tranche of a $ 1.5 billion loan, have helped boost sentiment, analysts said.

Shares in Ceylon Tobacco Company Plc rose 0.7%, while John Keells Holdings Plc gained 0.5% and Commercial Bank of Ceylon Plc, the country’s biggest listed lender, climbed 0.9%.