Stocks fall amid profit-taking in overbought market

20 Sep 2012 - {{hitsCtrl.values.hits}}

Sri Lankan stocks fell 1.4 percent yesterday as investors booked profits across the board in an overbought market after a 15-session rally.

The Colombo Stock Exchange’s main index, which fell 2.2 percent in early trade, recouped its early losses to end 1.04 percent, or 61.67 points, weaker at 5,849.14.

“We are going to see a lot of volatility. But foreign buying can give an extended life to this speculative and sentiment-driven market,” said a stockbroker, asking not to be identified.

The index had risen 19 percent in 15 sessions through Monday on hopes that the newly appointed Securities and Exchange Commission head will come up with ideas to revive the market, which is down 3.71 percent since the start of the year.

The bourse has been overbought since August 28, Thomson Reuters data shows. The 14-day Relative Strength Index yesterday was at 77.799, well above the upper neutral range of 70.

Turnover yesterday was Rs.1.22 billion ($9.25 million), more than the year’s daily average of Rs.921 million.

The bourse enjoyed a net foreign inflow of Rs.189.7 million worth of shares, extending the net foreign inflow so far this year to Rs.29.8 billion.

The rupee closed firmer at 131.55/60 to the dollar compared with Tuesday’s close of 131.90/95 as banks sold dollars on stock-related transactions amid lack of importer dollar demand, dealers said.

(Source : REUTERS)

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Stocks fall amid profit-taking in overbought market

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