Stocks hit over 3-year closing high

Thursday, 4 September 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Stocks hit their highest closing in more than three years on Wednesday, snapping a two-day losing streak, led by blue-chips such as Ceylon Tobacco Company Plc, conglomerate John Keells Holdings Plc and banking shares. Analysts said low interest rates and continued foreign buying into risky assets boosted sentiment. The main stock index rose 0.32%, or 22.28 points, to close at 7,047.10, its highest close since 16 August 2011. “There was lot of retail activity in the market, mainly in small- to medium-cap counters,” said Dimantha Mathew, Manager, Research at First Capital Equities Ltd. “These days institutions are silent with the index around the 7,000 mark. They are wondering whether the market is still buy. We also think the index has overshot earnings but expect earnings to catch up soon.” The index has gained nearly 19.18% so far this year. The Bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 76.649 on Wednesday, Thomson Reuters data showed. Stocks are deemed “overbought” above the 70-mark, which tends to signal a reversal in the near term. Ceylon Tobacco, which led gains, rose 1.39% to Rs. 1,196.4, while John Keells rose 0.77% to Rs. 249.50. Commercial Bank of Ceylon Plc, the biggest listed lender by market capitalisation, rose 1.01% to Rs. 150. Exchange turnover was Rs. 1.19 billion ($ 9.14 million), in line with this year’s daily average of Rs. 1.2 billion. Foreign investors were net buyers of Rs. 282 million worth of shares, extending the year-to-date net foreign inflows to Rs. 8.54 billion. The Central Bank did not offer 91-day t-bills at the weekly auction on Wednesday after it rejected all bids in the last two auctions, while yields on the 182-day and the 364-day Treasury bills held steady for the third time.

Rupee little changed amid inward remittances

Reuters: The rupee ended little changed against the dollar on Wednesday amid inward remittances and selling of the US currency by exporters, while demand for the greenback from importers weighed on sentiment, dealers said. They said the two State banks, through which the Central Bank usually intervenes to stem major declines in the currency, bought dollars at 130.19, a level which the Central Bank is seen comfortable with. They expect the local currency to remain steady for the rest of the year after Central Bank Governor Ajith Nivard Cabraal said recently the banking regulator would intervene in the thinly-traded market whenever needed to keep the rupee stable. The rupee ended at 130.19/21 per dollar, compared with Tuesday’s close of 130.20/21. “With the State banks buying, the rupee will not go down until they fulfil whatever their requirement,” said a currency dealer. Foreign investors bought a net Rs. 250 million ($ 1.9 million) worth of Government securities in the week ended 27 August, official data showed.