REUTERS - Sri Lankan shares rose nearly 1 percent yesterday as investors bought beaten-down stocks and the index touched its technical resistance level of 6,000 points.
The benchmark share index was up 0.9 percent at 6,001.87 at 0637 GMT, heading for its second straight session of gains.
“Very slowly buying interest is coming in from high net worth investors and short-term investors who expect short gains,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
“We expect the market to stabilise around 6,000 points.” With the Central Bank’s unexpected hike in interest rates in mid-February and yields on treasury bills at two-year highs, investors have been shifting to fixed interest rate-bearing assets over risk assets, stockbrokers said.
The market recovered on Thursday after two days of fall, with financial companies, which tend to benefit from higher interest rates, leading the way.
The rupee traded weaker on importer dollar demand, currency dealers said.
One-week rupee forwards, which act as a proxy for the spot currency, traded at 145.25/30 per dollar at 0631 GMT compared with Thursday’s close of 145.20/25.
“The market is illiquid and the demand is there,” a dealer said, asking not to be named.
The spot currency did not trade below 143.90, seen as the Central Bank’s desired level.