Stock market gains on bargain hunting, snap 5-day losing streak

Reuters - Shares edged higher on Friday, ending a five-day losing streak and recovering from a nine-month low hit in the prior session as investors picked up battered down shares.

Foreign investors turned net buyers on Friday after offloading shares for five straight sessions.

The bourse hit a nine-month low on Thursday as foreign investors sold close to one billion rupees worth of stocks in the first four sessions of 2017 amid worries over a weakening rupee and rising interest rates hurt sentiment.

Foreign investors bought a net 26.95 million rupees ($180,026.72) worth of equities on Friday. They have been net sellers to the tune of 969.69 million rupees so far this year.

The Colombo stock index ended 0.09% up at 6,153.02, edging up from its lowest close since 4 April hit on Thursday. It fell 0.64% for the week and was down 9.7% in 2016, its second straight annual decline.

The index has been trading in the oversold territory since Tuesday with the 14-day relative strength index breaking below 30, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

The day’s turnover was at 273.7 million rupees.

“Market edged up in thin volumes despite continued selling pressure,” said First Capital Equities Ltd Head of Research Dimantha Mathew.

Analysts said interest rate volatility and policy uncertainties are also hurting investor sentiment.

Yields on Treasury Bill auctions rose 5-6 basis points at a weekly auction on Wednesday, a day after the Central Bank governor signalled less intervention to defend the currency as market has braced for a depreciation.

Shares in Ceylon Tobacco Company PLC rose 1.17% while Colombo Cold Stores PLC rose 1.26% and Dialog Axiata PLC rose 0.95%.

Shares in biggest listed lender Commercial Bank of Ceylon PLC rose 0.42% while Conglomerate John Keells ended 0.43% up.

Talks of a high net worth foreign investor exiting from Keells has triggered panic selling, dealers said.