Sri Lankan shares end at over two-week high; turnover slumps
COLOMBO, July 14 (Reuters) – Sri Lankan shares hit a two-week high on Tuesday, helped by foreign inflows, gaining for a fourth straight session, but turnover slumped to a five-week low as investors were cautious ahead of the Aug. 17 parliamentary elections.
The main stock index ended up 0.35 percent, or 24.22 points, at 7,027.00, its highest close since June 29.
The day’s turnover slumped to 367.3 million rupees ($2.75 million), only around a third of this year’s daily average of 1.05 billion rupees.
"The market is up on low turnover with selective buying," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd. "Selective buying interest will be there until the elections are over."
Analysts said hopes of political stability after the election helped sentiment, but the gain cannot be sustained.
The ruling United National Party (UNP) has formed a coalition with some other parties to contest the election. Political analysts see the new coalition could increase the ruling party’s chances of winning.
However, a coalition led by Sri Lanka’s president has nominated war-time leader Mahinda Rajapaksa to run in elections next month, with allies saying he will stand for the post of prime minister, posing a formidable challenge to the ruling party’s election victory.
The stock market saw net foreign inflows of 35.96 million on Tuesday, ending its outflow streak over nine sessions.
Top fixed-line phone operator Sri Lanka Telecom Plc rose 6.43 percent, while Lion Brewery Plc gained 1.31 percent, pushing up the overall index.
President Maithripala Sirisena dissolved parliament on June 26 and scheduled elections for Aug. 17, in an effort to consolidate power and push through political reforms.