Sri Lanka stocks ease, ending 6-day winning streak

Mon Jan 6, 2014 6:32am EST

COLOMBO, Jan 6 (Reuters) - Sri Lankan stocks fell on Monday,
snapping six straight sessions of gains, despite foreigners
buying risky assets from an over-bought bourse. 
    The main stock index slipped 0.48 percent or 28.81
points to 5,944.99. It had touched a 11-week closing high of
6,007.79 on Friday, gaining 1.65 percent last week. 
    "It is a slow start. People are still getting in with not
much of activity," a stockbroker said on condition of anonymity.
    However, stockbrokers said, there has been demand for select
stocks, but they were not available in required quantity. They
expect the market to gain in high turnover due to reduction in
the market interest rate.
    The central bank slashed the standing lending facility rate
or reverse repurchase rate by 50 basis points to a multi-year
low of 8.00 percent on Thursday, in a move to reduce commercial
banks' interest rate spreads. 
    The day's turnover was 462.2 million rupees, less than last
year's daily average of about 828.4 million rupees. 
    Shares in Ceylon Tobacco Company PLC fell 0.16
percent to 1,186.30 rupees, while conglomerate John Keells
Holdings fell 0.61 percent to 227.50 rupees a share.
    The index's 14-day relative strength index, which was in an
over-bought region, fell to neutral territory, Thomson Reuters
data showed. 
    The index gained 4.8 percent in 2013 after losses in the
previous two years, giving a return of 2.18 percent in dollar
terms. Many investors locked their funds in risk-free debentures
instead of risky assets due to a sluggish bourse amid falling
interest rates. 
    Foreign investors bought 70.6 million rupees ($540,200)worth
of shares on Monday after buying a net 22.88 billion rupees
worth of stocks last year, compared with a record 38.68 billion
rupee net foreign inflow in 2011. 
($1 = 130.7000 Sri Lanka rupees)

 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil
Nair)
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