Sri Lanka shares rise to 3-week closing high

Sri Lanka's main stock index rose over 1 percent to a more than three-week closing high on Wednesday after the central bank in a surprise move cut key monetary policy rates by 50 basis points.

 

The main index gained 1.16 percent, or 79.97 points, to 6,981.03, its highest close since March 24.
Sri Lanka's central bank early in the day surprised markets by cutting key policy rates to record lows in a move aimed at boosting economic growth, but some analysts warned that the easing could worsen a shaky balance of payments position.

 

 

"We see the market will move up with this rate cut and some kind of political stability with the national government even after the parliamentary elections," said Danushka Samarasinghe, research head at Softlogic Stockbrokers (Pvt) Ltd.
Foreign investors were net buyers of 114 million rupees ($857,788) worth of shares on Monday, extending the net foreign inflow so far this year to 3.72 billion rupees.

 

The day's turnover was 979.9 million rupees, less than this year's daily average of about 1.11 billion rupees.
The index had lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold their holdings to settle margin trades amid concerns about political stability and a rise in interest rates.
Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party did not have a majority in parliament, stockbrokers said.

 

A rebound in beaten down blue chips such as biggest lender Commercial Bank of Ceylon, top mobile phone operator Dialog Axiata, and market heavyweight John Keells Holdings helped boost the index. Commercial Bank gained 3.7 percent, Dialog jumped 4.6 percent, and Keells rose 1.9 percent. (Reuters)