June 17, 2014 / 11:31 AM / 4 years ago

Sri Lankan shares end little changed

COLOMBO, June 17 (Reuters) - Sri Lankan shares ended little changed on Tuesday as gains in beverage stocks were offset by losses in diversified holdings, while expectation of a rate cut at the central bank’s policy review this week boosted sentiment, stockbrokers said.

The main stock index rose 0.31 points to 6,344.41, its highest close since June 6, 2013.

Continued foreign buying and expectation of an interest rate cut have boosted sentiment, and the market has been on a rising trend since late February.

The bourse saw a net foreign inflow for the 13th straight session. Foreign investors bought 56.3 million rupees ($432,400) worth of shares on Tuesday, extending the net inflow for the past 13 days to 3.97 billion rupees. They have been net buyers of 5.81 billion rupees so far this year.

Dealers said investors were waiting to see whether the weekend violence that killed at least three people and left 75 people seriously injured will continue and what impact it could have on the tourism sector.

Analysts said the market broadly expects a 50 basis point rate cut this week.

“Local interest is seen picking up with interest rates coming down and there are not much of opportunities seen for them to invest,” a stockbroker said on condition on anonymity.

The central bank has reduced its key policy rates to multi-year lows, but has not yet seen any improvement in credit and import growth. March credit growth slowed to a four-year low of 4.3 percent year-on-year.

Central bank Governor Ajith Nivard Cabraal told Reuters on May 30 that the bank was creating room to cut interest rates further.

The central bank will announce its June monetary policy rates on Wednesday.

Turnover was 1.08 million rupees, in line with this year’s daily average of 1.01 billion rupees.

Shares of Nestle Lanka PLC rose 1.21 percent to 1,949.40 rupees while conglomerate John Keells Holdings PLC fell 0.60 percent to 232.60 rupees. ($1 = 130.2000 Sri Lankan Rupees) (Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

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