Shares recover on bargain-hunting

REUTERS: Sri Lankan shares rose yesterday, recovering from a near three-month closing low hit in the previous session, as investors picked up battered stocks such as John Keells Holdings Plc. However, the gain was capped as worries about a capital gains tax on equities and rising interest rates weighed on sentiment. The benchmark Colombo stock index ended 0.41 percent higher at 6,280.39, after posting its lowest close since April 7 on Monday. It lost 1.3 percent last week, posting its third straight weekly loss.

Shares have been on a downward trend recently with comments from a minister last week about the imposition of a capital gains tax on equities dampening sentiment which was already hit by high interest rates and policy uncertainty. Turnover was Rs.254.7 million ($1.74 million) yesterday, well below this year’s daily average of Rs.731.9 million. Overseas funds, which have offloaded shares worth a net Rs.6.28 billion so far this year, were net buyers of Rs.23.9 million worth shares yesterday. Shares of conglomerate John Keells Holdings Plc rose 2.36 percent, while those of Lanka ORIX Leasing Co Plc gained 2.03 percent.