Sri Lankan shares near 7-month closing high; stability hopes help

COLOMBO, Aug 11 (Reuters) – Sri Lankan shares rose more than 1 percent on Tuesday to end near their highest level in nearly seven months as hopes of political stability and improved corporate earnings in the April-June quarter boosted sentiment, brokers said.

However, some foreign investors sold off the island nation’s risky assets.

The main stock index ended 1.1 percent up at 7,458.92, its highest close since Jan. 16. The gain helped raise the market capitalisation by 34.4 billion rupees.

The bourse has gained 7.73 percent in a month through Tuesday.

"Market was very bullish. More institutional and high net worth buying lifted the turnover. It’s a buyers market and investors were going up and buying," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

Conglomerate John Keells Holding Plc jumped 1.62 percent while Distillers Company of Sri Lanka Plc gained 3.47 percent.

Dialog Axiata Plc rose 1.75 percent and Nestle Lanka Plc rose 1.80 percent.

The index has been gaining since July 7 on expectations that strong corporate earnings and political stability after the elections on Aug. 17 would boost returns, analysts said.

Turnover stood at 2.61 billion rupees ($19.52 million) on Tuesday, more than double this year’s daily average of 1.13 billion rupees.

Foreign investors, however, sold a net 295.5 million rupees worth equities while they have offloaded a net 490.7 million rupees worth of shares so far this year.
 

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