December 3, 2014 / 6:26 AM / 4 years ago

Sri Lankan stocks rise on buying in blue-chips

COLOMBO, Dec 3 (Reuters) - Sri Lankan stocks traded firmer on Wednesday as investors picked up select blue-chips amid low volumes even as investors turned cautious over buying into risky assets on political uncertainty ahead of the Jan. 8 presidential poll.

At 0559 GMT, the main stock index was up 0.59 percent, or 42.40 points, at 7,272.98, moving away from the lowest since Sept. 5 it touched on Thursday.

“Today we are experiencing a considerable slowdown in turnover and volumes, but the market is up on select blue-chip shares,” said Dimantha Mathew, manager - research, at First Capital Equities (pvt) Ltd.

“There will be volatility but we expect the overall index to be flat in the long term until the elections are over.”

Nine loyalists from President Mahinda Rajapaksa’s United People’s Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since Rajapaksa announced the snap elections last week. Sirisena resigned to contest against Rajapaksa as the consensus candidate of a united opposition.

Speculation over more defections also weighed on sentiment, analysts said.

Turnover stood at 285 million rupees ($2.17 million), with 12 million shares changing hands.

Four-day rupee forwards traded slightly weaker on importer dollar demand, dealers said.

The spot currency and three-day forwards, or spot-next, were not traded after the central bank capped the currency at predetermined levels to prevent volatility.

Central bank officials were not available for comment.

Dealers said four-day forwards, or spot-next-next, which were actively traded, were quoted at 131.75/80 per dollar at 0603 GMT compared to Tuesday’s close of 131.72/77. ($1 = 131.1000 Sri Lankan rupee) (Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

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