Stocks edge higher as financials gain

REUTERS: Sri Lankan shares ended marginally firmer, led by financials, though gains were muted as investors looked for fresh cues from political and economic fronts, brokers said.

The Colombo stock index ended 0.08 percent higher at 6,523.88, recovering from its lowest since April 24 hit in the previous session. The index lost 0.15 percent last week.

“There is no sentiment booster for the market. The turnover was very low and investors are keen to see some positive factors in political and economical fronts,” said Prashan Fernando, CEO at Acuity Stockbrokers. Top lender Commercial Bank of Ceylon closed 0.3 percent firmer while Sampath Bank ended 0.4 percent higher.
Analysts said depreciation of the rupee also weighed on the sentiment as it is likely to dent the profits of some listed firms that rely heavily on imports. 

The Sri Lankan rupee hit a fresh low on Wednesday on importer demand for the U.S. currency, dealers said, but recovered after the central bank intervened in 
the market.

Fitch Ratings said yesterday that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22. Turnover stood at Rs.463.2 million (US$2.94 million), less than half of this year’s daily average of Rs.1.05 billion.

Foreign investors bought a net Rs. 46.3 million worth of equities yesterday, but the market has seen a net foreign outflow 
to Rs.622.7 million worth of equities so far this year.