REUTERS: Sri Lankan shares rose yesterday to its highest close in more than four months, led by gains in large caps while traffic woes caused by a heavy downpour dented the trading session. The benchmark stock index ended up 0.43 percent, or 28.56 points, at 6,708.40, its highest close since January 8. However, the gains were also capped on concerns that the government’s move to increase the value-added tax and impose new taxes, effective from May 2, would hit the bottom line of many companies.
The island nation experienced a massive downpour in the weekend, resulting in flash floods and also landslide threats in almost 10 districts of Sri Lanka, and caused heavy traffic in Colombo.
“There weren’t much activity today mainly because of the heavy rain,” said First Capital Equities (Pvt.) Ltd Head of Research Dimantha Mathew.
Shares of Nestle Lanka PLC ended up 2.65 percent while conglomerate Ceylon Tobacco Company PLC gained 1.29 percent.
Turnover was Rs.565.3 million, below this year’s daily average of around Rs.784.9 million.
Foreign investors were net sellers of Rs.50.4 million worth of equities yesterday extending the year-to-date net foreign outflow to Rs.3.93 billion worth of shares.
The 14-day relative strength index, which is in an overbought region, stood at 83.127 yesterday, compared with Friday’s 81.757, according to Thomson Reuters data. A level of 70 and above indicates the market is overbought.