Sri Lankan shares end higher ahead of cbank rate decision
COLOMBO, Dec 29 (Reuters) – Sri Lankan shares firmed up in low volume trade on Tuesday after hitting a near two-week low in the previous session, as financials and telecom stocks led the recovery ahead of the central bank’s decision on policy rates.
Turnover was however muted as many market participants kept away in the holiday season, traders said.
The main stock index rose 0.28 percent to touch 6,847.74 at the close, recouping from Monday’s loss, when it reached its lowest closing level since Dec. 15.
"Buying side is very weak and investors are also waiting for the central bank’s direction on the interest rates," a stockbroker said asking not to be named.
"If they are going to raise the monetary policy rates, investors may shift to fixed and risk free assets, from stocks."
Sri Lanka’s central bank is expected to raise interest rates by 25 basis points from record lows at its policy meeting on Wednesday, a Reuters poll found, a move that could relieve pressure on the fragile rupee.
Foreign investors sold a net 141.2 million rupees ($981,237) worth of equities, extending the net outflow to 4.44 billion rupees so far in the year.
Turnover stood at 306.6 million rupees, less than a third of this year’s daily average of 1.07 billion rupees.
Top fixed line phone operator Sri Lanka Telecom gained 2.6 percent, while Commercial Leasing and Finance plc rose 5.3 percent.
Top lender Commercial Bank of Ceylon, which saw net selling by foreign investors, ended flat, but accounted for around 50 percent of the day’s turnover.