April 2, 2015 / 12:06 PM / in 4 years

Sri Lankan shares close at more than 1-wk high on bargain hunting

COLOMBO, April 2 (Reuters) - Sri Lankan shares rose for a third straight session on Thursday, marking their highest close in more than a week on bargain-hunting in beaten-down stocks, after the index posted its biggest monthly drop since October 2012 in March.

The index ended up 0.46 percent, or 32.06 points, at 6,948.14 on Thursday, its highest close since March 25. It has gained 2.44 percent in the past three sessions through Thursday.

“Yesterday’s momentum continued in moderate turnover levels. We have seen some bargain hunting also coming into the market,” said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

The main stock index lost 6.6 percent last month as investors offloaded their holdings to settle margin trading amid concerns about political stability and a rise in interest rates.

The market’s 14-day Relative Strength Index (RSI) had fallen below 30 on March 30, Thomson Reuters data showed. A level of 30 or lower indicates the market is oversold. On Thursday, it rose to 39.977 from Wednesday’s 36.148.

Analysts expect trading to stay thin through mid-April ahead of a long traditional Sinhala-Tamil New Year holiday and amid political uncertainty.

Access Engineering rose for a third session and closed higher 7.40 percent. The infrastructure company had lost 26.61 percent though Monday after the new government cancelled an $85-million airport runway project awarded by the previous government on March 19.

Shares in DFCC bank Plc rose 1.71 percent.

The day’s turnover was 729 million rupees ($5.49 million), more than half of this year’s daily average of 1.17 billion rupees.

Both stock and currency markets are closed on Friday for a Buddhist and Catholic religious holiday. Normal trading will resume on Monday. ($1 = 132.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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