August 27, 2014 / 11:27 AM / 3 years ago

Sri Lanka stocks slips from 3-year high on low trade, retail profit-taking

2 Min Read

COLOMBO, Aug 27 (Reuters) - Sri Lankan stocks slipped on Wednesday, retreating from a three-year high hit on Tuesday, led by illiquid shares in low trade, with retail profit-taking in speculative shares, brokers said.

The bourse hit a three-year high on Tuesday, helped by the low interest rates and analysts said an increase in speculative trading in fundamentally weak shares could dent the healthy growth the index has seen this year.

The main stock index ended down 0.41 percent, or 28.41, at 6,984.91, slipping from its highest close since Aug. 18, 2011 hit on Tuesday.

The index has gained 18.13 percent so far this year.

"The market was brought down by the illiquid shares in low trade while we have seen some retail profit-taking in speculative counters," said Dimantha Mathew manager, research at First Capital Equities (Pvt) Ltd.

The index plummeted more than 20 percent after it hit a record peak in February 2011 mainly due to speculative trading.

Analysts said the market is struggling to hold above 7,000 points its psychological barrier which turned it to a technical barrier now.

Good Hope Plc, which led the overall fall in the index, fell 23.86 percent to 1,500 rupees in one share trade, while Lion Brewery (Ceylon) Plc fell 5.02 percent to 606 rupees.

Wednesday's turnover stood at 742 million rupees ($5.70 million), its highest since July 28 and well below this year's daily average of 1.2 billion rupees.

Foreign investors were net sellers of 2.91 million rupees worth of shares on Wednesday, but they have been net buyers of 8 billion rupees so far this year.

The central bank rejected all 91-day treasury bill bids at an auction for the second straight week, while the yields in the 182-day and 364-day treasury bills held steady at a weekly auction on Wednesday.

$1 = 130.2000 Sri Lankan rupee Reporting by Ranga Sirilal; Editing by Anand Basu

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