REUTERS: Sri Lankan shares rose 1.4 percent yesterday to their highest close in nearly one week as investors bought risky assets across the board in an oversold market. Foreign investors bought a net Rs.72.6 million worth of shares, marking their first net buy in eight sessions and extending the net buying this year to Rs.2.98 billion. The main stock index lost 7.31 percent in the 21 sessions through Monday and hit a more than eight-month closing low as investors offloaded their holdings to settle margin trading and on concerns about political stability.
The index ended 1.4 percent, or 95.74 points, firmer at 6,916.08 yesterday, its highest close since March 26.
“Across the board buying was there today. Slowly buying came into the market,” said First Capital Equities (Pvt.) Ltd Research Manager Dimantha Mathew.
“The positive sentiment will continue, but with the holiday season we may not see high volumes.”
The market’s 14-day Relative Strength Index (RSI) had fallen below 30 on March 30, Thomson Reuters data showed. A level of 30 or lower indicates the market is oversold. Yesterday, it rose to 36.148 from Tuesday’s 22.425. Analysts expect trading to stay thin through mid-April ahead of a long traditional Sinhala-Tamil New Year holiday and amid political uncertainty. Shares in Ceylon Tobacco Company PLC rose 2.55 percent, while Dialog Axiata PLC jumped 4.81 percent. The day’s turnover was Rs.616.5 million, more than half of this year’s daily average of Rs.1.17 billion.