Sri Lankan shares recover on bargain-hunting

COLOMBO, July 5 (Reuters) – Sri Lankan shares rose on Tuesday, recovering from a near three-month closing low hit in the previous session, as investors picked up battered stocks such as John Keells Holdings Plc.

However, the gain was capped as worries about a capital gains tax on equities and rising interest rates weighed on sentiment.

The benchmark Colombo stock index ended 0.41 percent higher at 6,280.39, after posting its lowest close since April 7 on Monday. It lost 1.3 percent last week, posting its third straight weekly loss.

Shares have been on a downward trend recently with comments from a minister last week about the imposition of a capital gains tax on equities dampening sentiment which was already hit by high interest rates and policy uncertainty.

Turnover was 254.7 million rupees ($1.74 million) on Tuesday, well below this year’s daily average of 731.9 million rupees.

Overseas funds, which have offloaded shares worth a net 6.28 billion rupees so far this year, were net buyers of 23.9 million rupees worth shares on Tuesday.

Shares of conglomerate John Keells Holdings Plc rose 2.36 percent, while those of Lanka ORIX Leasing Co Plc gained 2.03 percent.

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