Sri Lanka shares up from near two-week low ahead of cenbank policy
COLOMBO, April 26 (Reuters) – Sri Lankan shares edged up on Tuesday from its near two-week low hit in the previous session, as investors turned cautious, ahead of an imminent loan deal with the International Monetary Fund, and while awaiting cues from the central bank on interest rates.
The central bank’s April monetary policy announcement is scheduled for later on Tuesday, and expectations are that the bank would keep key interest rates steady, a Reuters poll showed.
However, a surprise hike is not ruled out as five of 11 analysts expect the central bank to raise the policy rate and keep government borrowing in check through tighter financing conditions.
The central bank has tightened rates twice since December to ease the pressure on a fragile rupee.
The benchmark stock index ended up 0.4 percent, or 25.76 points, at 6,405.29.
"A sudden retail buying which came in the latter part of the day put some upward pressure on the market. We do not think it can sustain with the high interest rates and also the poor economic conditions," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
A visiting IMF mission said it expected to complete negotiations with Sri Lanka for a three-year loan programme in the next two weeks.
Foreign investors were net buyers of 96.8 million Sri Lankan rupees ($665,063.55) worth of equities on Tuesday, but have been net sellers of 2.95 billion rupees so far this year.
Turnover stood at 540.7 million rupees, less than this year’s daily average of around 776.3 million rupees.
Shares in conglomerate John Keells Holdings Plc rose 1.84 percent.