Sri Lanka stocks gain to over 32-month high; Keells leads
COLOMBO, July 8
COLOMBO, July 8 (Reuters) - Sri Lankan stocks rose more than 1 percent on Tuesday, breaking the psychological barrier of 6,500 to hit their highest closing level in more than 32 months on foreign buying with lower interest rates helping investors across the board to buy risky assets, stockbrokers said.
The gains were led by diversified shares like conglomerate John Keells Holdings PLC and beverage shares like Nestle Lanka PLC.
The main stock index ended up 1.03 percent, or 66.81 points, at 6,565.81, its highest close since Oct. 13, 2011.
Shares in conglomerate John Keells Holdings PLC, which led the index gain, rose 3.30 percent to 234.60 rupees while Nestle Lanka PLC rose 6.21 percent to 2,095 rupees.
"Keells started moving up and gave a boost to the market. That boosted the retail investor sentiment supported by low interest rates," said Reshan Kurukulasuriya, COO of Richard Peiris Securities.
Turnover was 1.73 billion rupees, much higher than this year's daily average of around 1.05 billion rupees.
Foreign investors were net buyers of 290.2 million rupees worth of shares on Tuesday, the first time in three sessions and extending the year-to-date net foreign inflow to 9.22 billion rupees.
Brokers said investors were bullish about the market after witnessing large state funds actively trading last week.
Analysts said foreigners have been buying risky assets because they see value in them, while falling yields in fixed assets gradually prompt local investors to shift to equities.
They also say foreign buying could continue due to lower inflation after government data showed annual inflation eased to 2.8 percent in June, its lowest since February 2012, down from 3.2 percent a month earlier.
However, analysts said investors were concerned over the recent ethnic violence and possible implications of a government spokesman saying Sri Lanka bought Iranian crude via third parties.
The market has been on a rising trend since late February due to continued foreign buying and lower interest rates.