Stocks at three-week high; rupee steady
Reuters: Sri Lankan stocks jumped 1.6 per cent on Thursday to a more than three-week high on institutional buying of blue-chips stocks like John Keells Holdings PLC in an oversold market after the central bank kept policy rates steady.
The Central Bank held the key policy rates unchanged on Wednesday.
The main index rose 1.61 per cent or 78.23 points to end at 4,923.02, its highest since 28 May.
“The market’s upward movement was quite overdue because it was oversold,” Danushka Samarasinghe, Research Head at TKS Securities, told Reuters.
The market fell 10.8 per cent in May due to economic and political worries. It has recovered two per cent in June.
Market heavyweight and the top conglomerate John Keells Holdings gained 2.14 per cent to Rs. 186, while top private lender Commercial Bank of Ceylon gained 0.4 per cent to Rs. 100.90.
Analysts, however, said economic worries, in particular concern about rupee volatility, remained, resulting in thin trading volume. The day’s turnover was Rs. 427.8 million ($ 3.24 million), the highest since 7 June, but less than the daily average of Rs. 943 rupees this year.
Foreign investors were net sellers of Rs. 4.23 million worth of shares.
The rupee ended barely changed at 132.00/132.10 against the dollar from Wednesday’s close of 131.90/132.10. It hit an all time low of 133.60 on Tuesday on importer dollar demand.
On Thursday, Treasury Secretary P.B. Jayasundera told Reuters the rupee had hit its low and would stabilise around 125 per dollar in the medium term.
Analysts said currency dealers were waiting to see the outcome of an International Monetary Fund (IMF) mission meeting Government and Central Bank officials for talks on the last tranche of a $ 2.6 billion loan.
The IMF, which has long pressed the Central Bank to allow flexibility in the rupee exchange rate, is expected to release the last tranche of the loan – about $ 420 million – if it is satisfied with economic performance.
The currency has depreciated 16.4 per cent since 21 November, when the Government allowed a three per cent devaluation.
