Sri Lankan stocks end steady at near 2-week high; Keells boost turnover

COLOMBO, June 11 Wed Jun 11, 2014 8:37am EDT

COLOMBO, June 11 (Reuters) - Sri Lankan shares ended little changed on Wednesday at a near two-week closing high as gains in banking shares offset losses in palm oil producers, while buying in conglomerate John Keells Holdings Plc boosted the turnover.

Analysts said the market could undergo a technical correction as retail investors are waiting for profit-taking.

The main stock index ended 0.28 points weaker at 6,293.36, edging down from its highest close since May 29 hit on Tuesday.

Continued foreign buying and expectations of interest rates coming further down will boost sentiment and the market has been on a rising trend since late February, analysts said.

The bourse saw a net foreign inflow for the 10th straight session. Foreign investors bought 262.9 million rupees ($2.02 million) worth of shares on Wednesday, extending the net inflow for the past 10 days to 3.53 billion rupees worth of shares.

They have been net buyers of 5.37 billion rupees so far this year.

Turnover was 1.41 billion rupees, its highest since May 16 and more than this year's daily average of 1.01 billion rupees.

Analysts also said they expect retail profit-taking in the coming days as the market has been on the rise for a long time and retail investors have been waiting for better price to sell. We see some selling pressure on certain shares.

Analysts said the market expects a further fall in interest rates after central bank governor Ajith Nivard Cabraal told Reuters on May 30 that the central bank was creating room to cut interest rates further.

The central bank will announce its June monetary policy rates on June 18.

Shares in palm oil investor Bukit Darah Plc, which dragged the overall index, fell 2.82 percent to 631.70 rupees, while financial service provider Lanka Orix Leasing Co Plc rose 2.71 percent to 87.30 rupees a share.

Market heavyweight John Keells Holdings, which accounted for 54.7 percent of the days turnover, ended flat at 234.50 rupees after Capital Alliance in a note recommended investors to sell the conglomerate's shares, citing lower-than-expected earnings. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)