Profit-taking from recently high share prices ruled the Colombo Bourse yesterday, whilst most analysts expect the positive momentum to persist.
“The indices lost ground towards the latter hours of trading on heavy selling pressure across the board,” John Keells Stock Brokers said.
Arrenga Capital said that following the SEC’s positive response in easing brokers’ credit, the market continued moving up, initiating trading on a positive note, to register an intra-day high of 7,142.06 points (up 91.32 points) during early hours of trading.
“However, it could not sustain the momentum as investors plunged to a selling mode following the gains registered by most counters. The across the board cautious approach taken by investors, with retailers taking the lead, led the market to lose grounds by mid-day to close marginally low whilst the more liquid index was held flat,” it said.
SC Securities said both the market indices were in the green during early trading but lost ground towards the end of the day with profit taking causing downward pressure on the indices. All round investor interest was evident on the trading floor during the day.
“Indices surged during early trading continuing the positive momentum. However, profit taking across the board closed the indices on a mixed note,” NDB Stockbrokers said.
DNH Financial said profit taking appeared to be the order of the day. “The MPI however gained a notch to end at 6,437 on the back of gains in blue chip stocks,” it added.
“While the bourse appears to have taken a breather, we believe that this is temporary and market trajectory should continue increasingly on an upward trend,” DNH said.
In this respect it is advising investors to consequently take advantage of any price weakness and accumulate positions in fundamentally strong counters. DNH remains overweight on the manufacturing, banking, diversified and hotels sectors but emphasised the need for a careful bottom up stock selection strategy to identify stocks within these sectors that would outperform.