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Sri Lanka index ends 7-day rising streak; slips on profit-taking
July 11, 2014 / 11:25 AM / in 3 years

Sri Lanka index ends 7-day rising streak; slips on profit-taking

COLOMBO, July 11 (Reuters) - Sri Lankan stocks fell on Friday from the previous session’s 33-month closing high, snapping a seven session winning streak, as local investors booked profits in an overbought market, stockbrokers said.

The bourse had gained 4.5 percent in seven straight sessions through Thursday and is in the overbought region since July 3, fuelled by lower interest rates and continued foreign buying.

The main stock index fell 0.11 percent, or 7.46 points, to 6,661.40, slipping from its highest close since Oct. 10, 2011.

“There was a bit of profit-taking. The market is little overbought but it will recover next week,” a stockbroker said on condition of anonymity.

Foreign investors, however, were net buyers of 100.9 million rupees worth of shares on Friday, extending the foreign inflows to 9.39 billion rupees worth of shares so far this year.

Analysts see room for gain with a P/E ratio of around 14.5 and resistance level at 7,000.

The fall was led by Commercial Bank of Ceylon PLC, which was down 1.48 percent to 146.30 rupees a share. Carsons Cumberbatch PLC fell 2.33 percent to 420 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 1.67 billion rupees ($12.83 million), well above this year’s daily average of around 1.09 billion rupees.

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 = 130.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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