COLOMBO, July 10 Sri Lankan stocks rose for a
seventh straight session on Thursday to their highest close in
33 months as lower interest rates compelled investors to buy
risky assets, while foreign buying also boosted sentiment,
The main stock index ended up 0.83 percent, or 55.02
points, at 6,668.86, its highest close since Oct. 10, 2011. It
has gained 4.5 percent in seven straight sessions through
"We see the resistance level at 7,000. With a P/E ratio of
around 14.5, there is still room for gains," said a stockbroker
on condition of anonymity. "I don't see this as overheating.
There could be some profit-taking from time-to-time."
The gains were led by large-cap consumer staples shares like
Ceylon Tobacco Company PLC, which gained 3.12 percent
to 1,100 rupees.
Lower interest rates have prompted local investors to buy
shares and shift their savings from unattractive fixed assets,
analysts said, as yields on treasury bills edged down further at
a weekly auction on Wednesday.
Turnover was 2.36 billion rupees ($18.12 million), more than
twice this year's daily average of around 1.07 billion rupees.
Foreign investors were net buyers of 349.8 million rupees
worth of shares on Thursday, extending the foreign inflows to
9.29 billion rupees worth of shares so far this year.
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.
The market has been on a rising trend since late February
due to continued foreign buying and lower interest rates.
($1 = 130.2300 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Sunil Nair)