Rupee sharply down, stocks surge 1.9%

ECONOMYNEXT: The rupee closed weaker at around 173.80/174.00 rupees against the US dollar in the spot market yesterday amidst a constitutional crisis and gilt yields ended sharply higher and stocks surged 1.92 percent, the highest gain in four years, market participants said.
The rupee traded at an all-time low of Rs.174.30 earlier in the day, market participants said.

The rupee had opened yesterday at Rs.174.00/50 in two way quotes against the greenback, weakening from Friday’s Rs.173.05/20 closing.
In early trade the rupee appeared to float but it is not clear whether the rupee floated cleanly. A clean float would restore confidence quickly and end further sterilization, taking away pressure on the currency. 

Colombo’s All Share index rose sharp 1.92 percent, up 112.22 points to 5,944.18, and the S&P SL20 of more liquid stocks gained 2.04 percent, up 61.26 points to 3,058.59.

Brokers said turnover was mostly driven by strategic investments in John Keells Holdings and Distilleries, while speculative retail play was also seen lifting the bourse.

Market turnover was Rs.4.16 billion, with 165 stocks making gains against 18 that declined.

John Keells Holdings contributed Rs.2.97 billion to the day’s turnover. The stock was up Rs.1.80 to Rs.141.90. There were six crossings in John Keells Holdings for Rs.2.8 billion with foreigners on the sell side.

Distilleries (up Rs.1 to Rs.18), Commercial Bank (up Rs.3.70 to Rs.114) and Hemas Holdings (up Rs.6 to Rs.90) contributed to the benchmark index’s sharp gain. Access Engineering was up Rs.2 to Rs.15.80 and MTD Walkers ended Rs.1.80 higher at Rs.9.80.

Net foreign selling was Rs.3 billion, up from Rs.48.3 million the previous day.

Foreign selling in John Keells Holdings was Rs.2.8 billion, followed by Rs.167 million in Hatton National Bank, according to Asia Securities.
Hatton National Bank closed Rs.1.70 higher at Rs.210.

Off-market negotiated trades, or crossings, amounted to Rs.3.5 billion and was 84 percent of market turnover.

Apart from the six crossings at John Keells Holdings, there were six in Hatton National Bank for Rs.416.6 million and one in Softlogic Holdings for Rs.303 million.

Softlogic Holdings was up 80 cents to Rs.20.40. Gilt yields rose sharply in the secondary market as Moody’s Investors Service, a rating agency said Sri Lanka’s political crisis was credit negative.

A three-year bond maturing in 2021 ended higher at 11.20/30 percent, up from 10.85/95 percent the previous day.

A five-year bond maturing in 2023 closed at 11.40/60 percent, up from the previous close of 11.35/40 percent.