Stock market recovers on bargain-hunting

Reuters: Shares rose on Tuesday, recovering from a near three-month closing low hit in the previous session, as investors picked up battered stocks such as John Keells Holdings Plc.However, the gain was capped as worries about a Capital Gains Tax on equities and rising interest rates weighed on sentiment.

The benchmark Colombo stock index ended 0.41% higher at 6,280.39, after posting its lowest close since 7 April on Monday. It lost 1.3% last week, posting its third straight weekly loss.

Shares have been on a downward trend recently with comments from a minister last week about the imposition of a Capital Gains Tax on equities dampening sentiment which was already hit by high interest rates and policy uncertainty.

Turnover was Rs. 254.7 million ($1.74 million) on Tuesday, well below this year’s daily average of Rs. 731.9 million.

Overseas funds, which have offloaded shares worth a net Rs. 6.28 billion so far this year, were net buyers of Rs. 23.9 million worth shares on Tuesday.

Shares of conglomerate John Keells Holdings Plc rose 2.36%, while those of Lanka ORIX Leasing Co Plc gained 2.03%.