Stock market rebounds

Reuters - Sri Lankan shares rose on Friday to hit its highest close in more than four months, led by gains in telecommunication and hotel stocks.

However, the gains were capped on concerns that the government’s move to increase the value added tax and impose new taxes, effective from 2 May, would hit the bottom lines of companies. “Today the market is up on a positive feeling with the foreign inflow, but we feel it’s temporary,” head of research at SC Securities Ltd Yohan Samarakkody said.

The benchmark stock index ended up 0.36%, or 23.72 points, at 6,679.84, at its highest closing level since 8 January.

Shares of Nestle Lanka PLC jumped 2.32% while conglomerate John Keells Holdings PLC rose 0.43% and Dialog Axiata PLC gained 0.90%.

Turnover was 826.7 million rupees ($5.69 million), more than this year’s daily average of around 787.5 million rupees.

Foreign investors, who have sold equities worth 3.88 billion rupees so far this year, were net buyers for the first time in four sessions on Friday. They bought a net 97.4 million rupees worth of shares.

The stock index gained 1.3% during the week for a sixth straight weekly rise.

The 14-day relative strength index stood at 81.757 on Friday, compared with Thursday’s 80.539, Thomson Reuters data showed. A level of 70 and above indicates the market is overbought.