Sri Lankan shares end at over six-week high on hopes of political stability
COLOMBO, July 16 (Reuters) – Sri Lankan shares closed at their highest level in over six weeks on Thursday on heavy volume, led by select stocks as hopes of political stability after the Aug. 17 parliamentary elections helped boost sentiment.
The main stock index ended up 0.82 percent, or 57.95 points, at 7,124.14, its highest close since June 3.
"Now there is a perception that the ruling party has an edge in the election and there will be policy continuity," a stockbroker said on condition of anonymity.
"There could be volatility in the market until the election, but we see more interest in the market now compared to two weeks back. Election date, nominations, and president’s stance on the election have addressed a number of uncertainties from the market," the broker said.
On Tuesday, President Maithripala Sirisena criticised a comeback bid by Mahinda Rajapaksa, whom he beat in elections last January, and his own allies for backing him to become prime minister.
Analysts see Sirisena’s statement as a step towards strengthening his grip and likely to help the ruling coalition win at the polls.
The ruling United National Party (UNP) has formed a coalition with some other parties to contest the election. Political analysts say the alliance could increase the ruling party’s chances of winning.
The day’s turnover was 1.57 billion rupees ($11.73 million), its highest since July 3 and more than this year’s daily average of 1.05 billion rupees.
Shares in leading fixed line telephone operator Sri Lanka Telecom Plc rose 3.73 percent, while Lanka ORIX Leasing Co Plc rose 2.50 percent, pushing up the overall index.
Biggest listed lender Commercial Bank of Ceylon Plc rose 1.92 percent.