September 6, 2011 / 11:56 AM / 8 years ago

Sri Lanka stocks dip on retail selling

* Investors take profit on speculative shares

* Foreign funds net sellers of 119.3 mln rupees

* Rupee steady despite importer dlr demand

COLOMBO, Sept 6 (Reuters) - Sri Lanka’s stock market fell on Tuesday in heavy volumes as retail investors took profits and institutional investors remained cautious after a two-week high in the previous session.

The island nation’s main share index lost 0.6 percent, or 41.82 points, to 6,956.21 from its highest close since Aug. 18. Having been Asia’s best performer this year, the decline on Tuesday clipped the bourse’s return so far down to 4.83 percent, behind Indonesia’s .

Banking and telecommunication shares pulled the market down, with losers outnumbering gainers by 150 to 62, Thomson Reuters data showed. .

Non-voting and voting shares in jeweller Blue Diamonds BLUEt.CM , which had respectively jumped 122 percent and 50 percent in the previous three sessions, fell 8.47 percent and 9.76 percent.

“Retail-dominated speculative counters are getting pushed either way till we see serious buying,” said a stockbroker.

The day’s turnover was 3.24 billion Sri Lanka rupees ($29.4 million), more than last year’s average of 2.4 billion and this year’s 2.7 billion.

The bourse witnessed a foreign outflow of 119.3 million rupees on Tuesday.

After the end of a long civil war, Sri Lanka’s bourse became Asia’s best performer in 2009 and 2010, gaining 124 percent and 96 percent, respectively.

Tuesday’s total volume was 374.4 million, against a five-day average of 339.1 million and a 90-day average of 133 million. Last year’s daily average was 67.9 million.

The rupee closed steady at 110.09/10 a dollar from Monday’s close, despite heavy dollar demand from importers as a state bank through which the central bank directs the market sold dollars at 110.10 rupees, dealers said.

FACTORS TO WATCH:

- Will the rupee rise after the cenbank relaxed tough FX controls

DATA

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 3.122-2.686

2014 5-yr $500 mln 4.423-4.119

2020 10-yr $1,000 mln 5.9250-5.7838

2021 10-yr $1,000 mln 5.9380-5.8055

* 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 = 110.085 Sri Lanka Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Will Waterman)

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