Stock market subdued ahead of Vesak holidays

Wednesday, 10 May 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares closed little changed on Tuesday, hovering near their highest close in about one year, with gains in banks offset by losses in beverage and telecommunication shares.

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

With the pressure on the rupee abating and yields for government securities easing, the Central Bank kept key interest rates steady at more than three-year highs at a policy meeting on Tuesday.

The Colombo stock index ended 0.01% weaker at 6,666.83, hovering near its highest close since 18 May, 2016 hit on Monday. It added 0.5% last week, its sixth straight weekly gain.

“With the rates being held steady and yields in T-bills coming down, the market will continue the bullish run after holidays,” said Softlogic Stockbrokers Deputy CEO Hussain Gani.

Volume was moderate as many investors were on the sidelines ahead of holidays. The financial markets will be closed on Wednesday and Thursday for Buddhist religious holidays.

Turnover stood at Rs. 720.9 million ($ 4.74 million), less than this year’s daily average of Rs. 894 million.

Foreign investors net bought shares worth Rs. 30.1 million, extending their year-to-date investment in equities to Rs. 16.77 billion.

They bought a net Rs. 14.28 billion in the last 32 sessions, and out of these, the Bourse saw net foreign buying in 31.

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 Nestle Lanka Plc ended 1.7% weaker, Sri Lanka Telecom Plc fell 1.7% and conglomerate John Keells Holdings Plc ended 0.2% weaker.

Lanka ORIX Leasing Co Plc ended 4.1% firmer, while Commercial Bank of Ceylon Plc, the country’s biggest listed lender, climbed 0.3%.