Sri Lankan shares end steady despite foreign selling
COLOMBO, May 28 (Reuters) – Sri Lankan shares ended steady near a two-week low on Thursday as local buying offset foreign selling in blue-chips.
Stockbrokers, however, said that most investors have been cautiously optimistic in a lower interest rate environment as concerns about political stability and the timing of a parliamentary election weigh on sentiment.
The main stock index ended a tad firmer, up 0.03 percent to 7,255.71, and near its lowest close since May 14 hit in the previous session.
Foreign investors sold a net 451.3 million rupees ($3.4 million) worth of shares on Thursday, extending foreign outflows to 1.13 billion in the last three sessions. But the bourse has seen net inflows of 4.63 billion rupees in equities so far this year.
Turnover was 1.38 billion rupees, beating this year’s daily average of about 1.14 billion rupees.
Among the gainers, Distilleries Company of Sri Lanka Plc rose 2.87 percent, while Bukit Darah Plc added 1.2 percent.
Political uncertainty due to the Ranil Wickremesinghe-led government not having a majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.
The index has gained 5.2 percent since the rate cut.
Analysts say a new stable government after the election coupled with strong economic measures would boost confidence.