COLOMBO, Sept 1 (Reuters) - Sri Lankan shares dipped slightly in thin trade on Monday with the handful of active investors shedding blue chip stocks after their poor performance this quarter.
The Colombo All-Share indexedged down 0.46 points or 0.02 percent to 2,408.18, its second straight fall.
"The market is taking a breath after lower-than-expected corporate earnings from the main companies," Geeth Balasuriya, assistant research manager at HNB Stockbrokers, said.
The market in the past few days has been driven by speculative trading, he said.
"We didn't see that today, mainly because investors are waiting for directions on the economic front, expecting interest rates to fall."
The top conglomerate by market capitalisation, John Keells Holdings, closed 0.5 percent weaker at 99.50 rupees a share calculated on a weighted average. On Friday, it posted a mere 1.4 percent net profit growth in its June quarter.
Private lender Hatton National Bankfell 1.44 percent to 103 rupees in thin trade, while local alcoholic beverage manufacturer Distilleries Company of Sri Lanka closed 0.31 percent down at 80 rupees.
Sri Lanka's No.1 mobile phone operator, Dialog Telekom, which repored a 78 percent fall in its June quarter profit, hit a new life low of 11 rupees a share before closing flat at 11.25 rupees a share.
Shares in Colombo Dockyardclosed 5.71 percent firmer at 74 rupees a share, after the company posted a more than doubled net profit of 392.5 million rupees in its June quarter compared to an year ago.
Market turnover was 103.2 million Sri Lankan rupees ($95,760), around a quarter of last year's daily average of 400 million rupees.
Sri Lanka's annual average inflation rose to a six-year high of 22.6 percent in August from 21.9 percent in July, while the consumer price inflation eased to a year-on-year 24.9 percent this month from a 26.6 percent in July. See [ID:nCOL279297].
Central Bank Governor Ajith Nivard Cabraal last week said inflation may fall to single digit levels by the end of 2009, and down to 20 percent by December.
Cabraal warned that the bank's tight monetary policy would mean growth in 2008 would be slightly less than the forecast 7 percent. See [ID:nCOL177924].
The rupeeclosed firmer at 107.78/80 per dollar from Friday's close of 107.88/90 on high call money rates and intervension from a state bank.
"High call money rate prompted some banks to sell dollars to cover their positions in rupees, while a state bank bought dollars at 107.80 levels," a currency dealer said.
The central bank on Monday said it will issue $70 million in two-year dollar development bonds to repay investors holding two-year bonds that are due to mature on Sept. 22. See [nCOL227463].
The interbank lending rate or call money rateedged up to 16.579 percent, from Friday's 16.405 percent. (Editing by Bryson Hull)
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