* Bourse retreats after early gain on selling pressure
* Foreigners sell net 234.1 million rupees worth shares
* Rupee firmer on cbank lowering dlr trading band
COLOMBO, June 30 (Reuters) - Sri Lankan stocks fell to a near seven-month low in thin trade on Thursday on selling pressure due to month-end settlements while speculative trading continued amid margin calls that forced selling and low liquidity.
Sri Lanka's main share index slipped 0.76 percent or 52.21 points to 6,825.94, its lowest since Jan. 6. The index gained 0.5 percent in early trade, but selling pressure on forced sales amid low liquidity weighed down on the index.
It had shed 7.6 percent in June alone, but is still up 2.86 percent so far this year. It was the Asia-Pacific's top performer in 2010 and 2009 with 96 percent and 125 percent returns, respectively.
Forced selling by brokers continued in line with the policy of the regulator Securities and Exchange Commission (SEC) to recover credits, while over 6 billion rupees has been locked up in the two recent initial public offerings.
Foreign investors were net sellers of 234.1 million rupees worth of shares on Thursday, and have sold a net 7.4 billion rupees in 2011 after a record 26.4 billion in 2010.
The day's turnover was 1.9 billion Sri Lanka rupees ($17.3 million), well below last year's average of 2.4 billion and this year's daily average of 2.85 billion.
Traded volume was 72 million, lowest since May 6, against a five-day average of 92.6 million. The 30-day and 90-day average trading volumes were 187.6 million and 104.7 million, respectively. Last year's daily average was 67.9 million.
The rupee closed firmer at 109.49/50 a dollar from Wednesday's 109.58/60 as the central bank lowered its dollar trading band by 10 cents for the second day to 108.90/109.50 from 109.00/60 despite heavy importer dollar demand, dealers said.
FACTORS TO WATCH:
- Whether foreign investors will buy shares in large volumes.
- Whether Sri Lanka can achieve an 8.5 pct growth target amid rising global oil prices and inflation.
- The extent of the rupee's appreciation.
Colombo Stock Exchange:
Stock Market Volume (Shares)
Current Volume Average Volume 30 Days
Yield and Price of Sri Lanka's sovereign bonds:
Maturing year Tenure amount Reuters yield
2012 5-yr $500 mln 2.648-2.218
2014 5-yr $500 mln 4.499-4.211
2020 10-yr $1,000 mln 6.2843-6.1408
* For Sri Lankan treasury securities benchmarks and data, please click and
* For interbank lending rate or call money rate or
* For secondary market rates, please see <0#LKBMK=>. ($1 = 109.600 Sri Lanka Rupees) (Reporting by Ranga Sirilal; Editing by Shihar Aneez & Sunil Nair)