Shares hit 7-week closing high; banks gain

REUTERS: Sri Lankan shares rose for a third straight session yesterday to end at their highest close in seven weeks led by banks and diversified shares, while continued foreign buying in the market underpinned positive sentiment.

The Colombo stock index ended 0.51 percent up at 6,470.96, its highest close since August 14. The index gained 0.2 percent last week, recording its third straight weekly gain.

Foreign investors bought a net Rs.11 million worth of shares yesterday, extending their year-to-date net foreign inflow to Rs.18 billion worth of equities.

Turnover stood at Rs.549.4 million, less than two-third of this year’s daily average of Rs.914.8 million.

“We expect the overall positive sentiment in the market to continue for a few more days,” said First Capital Holdings Head of Research Dimantha Mathew.

“High-net-worth and retail investor participation was seen in plantation sector, though it did not impact the overall market. Meanwhile, institutions and foreign investors were looking to buy blue chips.”

Analysts said the market shrugged off a statement by the International Monetary Fund, which on Friday said Sri Lanka’s Central Bank should be ready to tighten monetary policy to contain inflation and credit growth.

Shares of Ceylon Tobacco Company PLC rose 3 percent while, Lanka ORIX Leasing Company PLC ended 4 percent firmer while Hatton National Bank PLC gained 2.1 percent.

On Tuesday, the Sri Lankan Central Bank held its key rates steady, saying past steps were keeping inflation and credit growth under control, as policymakers focus on supporting an economy hit by extreme weather.