July 1, 2014 / 11:26 AM / 4 years ago

Sri Lanka shares dip from over 1-yr high; John Keells boosts turnover

COLOMBO, July 1 (Reuters) - Sri Lankan stocks slipped on Tuesday from their highest close in more than a year, ending a five-session winning streak, as gains in diversified shares were offset by falls, mainly in palm oil shares.

Foreign buying in John Keells Holdings PLC boosted the turnover and net inflows from offshore investors to a more- than-7-week high.

The main stock index fell 0.04 percent, or 2.61 points, to close at 6,376.01. On Monday, the index had hit its highest since June 5, 2013.

Turnover stood at 4.72 billion rupees, the highest level since May 9 and four times this year’s daily average of 1.03 billion rupees.

The bourse saw net foreign inflows for the sixth straight session. Foreign investors were net buyers of 1.03 billion rupees ($7.91 million) of stocks on Tuesday, extending foreign inflows so far this year to 7.28 billion rupees.

Conglomerate John Keells Holdings PLC, which accounted 58.03 percent of the day’s turnover, rose 1.09 percent to 222.30 rupees. Foreign investors bought 5.03 million shares in Keells.

Shares in palm oil firm Shalimar Estates fell 8.88 percent to 2,227.50 rupees a share.

Analysts, however, said the market would move sideways in the short term with lesser risk due to lower interest rates.

Analysts said 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, edging down from 3.2 percent a month ago

However, analysts said investors are concerned over the recent ethnic violence and possible implications of a government spokesman saying Sri Lanka bought Iranian crude via third parties.

The market has been on a rising trend since late February due to continued foreign buying and lower interest rates. ($1 = 130.2800 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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