COLOMBO, July 8 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
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
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
The market has been on a rising trend since late February
due to continued foreign buying and lower interest rates.
($1 = 130.2600 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil