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Sri Lankan shares snap losing spree to end higher

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JULY 31, 2018

COLOMBO, July 31 (Reuters) – Sri Lankan shares ended their losing spree to close higher on Tuesday as investors picked up battered blue-chip stocks, but lean first-quarter corporate results dampened sentiment.

The Colombo stock index ended 0.3 percent firmer at 6,147.27, edging up from its lowest close since July 12 hit on Monday. The bourse dropped 3.5 percent so far this year.

The index fell 0.47 percent last week, marking its first weekly decline in three.

Turnover stood at 409.9 million rupees ($2.57 million), less than this year’s daily average of 856.1 million rupees.

“We can see the local buying interest coming in to the market at the psychological support level of 6100 levels,” said Dimantha Mathew, head of research, First Capital Holdings.

“It is a good sign that the selling pressure is not there and we can see some select buying interest coming in to the market.”

Foreign investors sold equities net worth 731,474 rupees on Tuesday, extending the year-to-date net foreign outflow to 2.5 billion rupees worth of equities so far this year.

A downward revision in economic growth estimate earlier this month by the central bank hurt sentiment, analysts said.

Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, Central Bank Governor Indrajit Coomaraswamy said earlier this month.

Shares in Nestle Lanka Plc ended 2.9 percent higher, while Ceylon Tobacco Company Plc ended 1.3 percent firmer, Ceylinco Insurance Plc closed 3.1 percent up and Carson Cumberbatch Plc ended up 0.9 percent.