Sri Lankan shares gain on hopes of political stability, earnings

COLOMBO, Aug 5 (Reuters) – Sri Lankan shares ended at their highest in more than six months on Wednesday with strong turnover on hopes of political stability after the Aug. 17 parliamentary elections and better earnings in the April-June quarter, brokers said.

The main stock index ended 0.77 percent, or 56.26 points up, at 7,366.31, its highest level since Jan. 29, Thomson Reuters data showed.

"June-quarter earnings have been good so far and investors expect better earnings to continue," said Prashan Fernando, CEO at Acuity Stockbrokers. "We expect the index to be volatile with profit-taking here and there until Aug. 17 election."

The index had gained 6.4 percent in nearly a month through Wednesday as investors picked up risky assets on expectations of strong corporate earnings and political stability after the election in which political analysts see the current ruling party having an edge over the opposition coalition.

Turnover stood at 2.4 billion rupees ($17.98 million), its highest since July 29 and more than double of this year’s daily average of 1.1 billion rupees.

Gains were led by Commercial Credit and Finance Plc , which rose 8.03 percent. Top mobile phone operator Dialog Axiata Plc gained 0.92 percent.

Foreign investors, who sold a net 538.1 million rupees in equities on Wednesday, have bought a net 162.91 million rupees worth of shares so far this year.

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