Shares edge down on profit taking; rupee ends higher

(Colombo) REUTERS: Sri Lankan shares ended marginally lower yesterday from their highest level in more than a year hit in the previous session, as investors booked profits after a post-election rally, while the rupee rose to a nearly three-month peak.

Former wartime defence chief Gotabaya Rajapaksa on Saturday won presidential election and assumed office on Tuesday as the seventh President of the island nation.

Prime Minister Ranil Wickremesinghe will resign this week, a spokesman from his office said yesterday, after his party’s candidate lost a presidential election. 

Rajapaksa made national security his top priority after being sworn in on Monday. Majority of Sinhala Buddhists voted for him after he campaigned on promises to make the nation safer in the aftermath of the Easter bombings earlier this year.

The benchmark stock index, which rose 0.53 percent in the early trade, ended 0.07 percent weaker at 6,138.59, edging down from its highest close since August 9, 2018 hit on Tuesday. The bourse rose 1.53 percent last week, and it is up 1.42 percent for the year.

“We believe the investor sentiment is positive and it continues to be positive with the political stability on top of the low interest rate regime. Today, the market came off as investors booked profits while the local retail investors turned towards mid cap shares,” said Dimantha Mathew, Head of Research at broker First Capital Holdings.

The rupee ended 0.1 percent firmer at 179.20/40 per dollar, its highest since August 21. It closed at 179.25/50 on Tuesday and is up 1.89 percent so far this year.
Foreign investors were net sellers of riskier assets for the tenth straight session yesterday.

They sold a net Rs.624.3 million worth of shares yesterday, extending the net foreign outflow from the equities market to Rs.8.9 billion for the year, according to index data.

Equity market turnover was Rs.2.05 billion, well above this year’s daily average of about Rs.705.9 million. Last year’s daily average was Rs.834 million.

Meanwhile, foreign investors bought government securities on a net basis for the fourth time in six weeks, buying a net Rs.2.2 billion worth of government securities in the week ended November 13.

Total foreign outflows from government securities through November 13 stood at Rs.48 billion, the Central Bank data said.