Shares recover from near 2-week closing low; rupee down

(Colombo) REUTERS: Shares recovered yesterday from a near two-week closing low in the previous session, led by financials and consumer staples, but trading volume was light as investors waited for more clarity on the political front.

The benchmark stock index ended 0.74 percent firmer at 5,912.46, recovering from its lowest close since Aug. 6 hit on Monday. The index posted a loss of 0.82 percent last week, its first weekly decline in eight.

Investors have been in a wait-and-see mode after the main opposition party named a hard-line former defence chief as its presidential candidate, to capitalise on public clamour for a decisive leader.

The market has been looking forward to hearing policies from former defence chief Gotabaya Rajapaksa as well as the ruling party’s presidential candidate who is yet to be announced, dealers said.

Gotabaya, 70, served under his elder brother, ex-president Mahinda Rajapaksa, and is widely seen as the front runner in a presidential election that must be held before Dec. 9.
The market had gathered strength early this month amid speculations of the wartime defence chief contesting for presidency, dealers said.

So far this year, the stock index has dropped about 2.3 percent. Turnover was Rs.383.9 million yesterday, nearly half of this year’s daily average of about Rs.653.6 million so far. Last year’s daily average came in at Rs.834 million.

Large cap Ceylon Tobacco Company gained 3.6 percent and top conglomerate John Keells Holdings rose 1.4 percent, pushing the overall index up.

The rupee ended 0.4 percent weaker at 178.00/05 per dollar, compared to Monday’s close of 177.30/50. The currency was down 0.2 percent for the last week, but is up nearly 2.6 percent so far this year.

Foreign investors bought a net Rs.0.61 million worth of government securities in the week ended Aug. 13. But the market has suffered year-to-date net foreign outflow of Rs.28 billion, the Central Bank data showed.