Thursday, October 7, 2010

Sri Lanka shares at 2-wk low on correction; rupee up

 * Bourse down 1.3 pct mainly on profit taking

 * Stx lose 5.3 pct in four straight sessions on correction

 * Rupee at 22-mo high; exporters sell dlrs on high premiums


 COLOMBO, Oct 7 (Reuters) - Sri Lanka's benchmark share index lost for a fourth straight session on Thursday with a 1.34 percent fall as investors booked profits in diversified and banking shares after a recent surge, analysts said.

 Sri Lanka's main share index .CSE closed 91.93 points weaker at 6,770.74. It is still Asia's best performer in 2010 with a 100 percent gain. The index had risen 26.3 percent since Sept. 1 through Friday.

 The bourse was driven down by blue chips led by a 1.5 percent fall in market heavyweight John Keells Holdings JKH.CM and 1.6 percent drop in private lender Hatton National Bank HNB.CM.

 The bourse has fallen 5.3 percent in the last four sessions and that has brought down the index to the neutral region from an overbought zone with the 14-day relative strength index (RSI) on Thursday at 64.6, below the upper neutral limit of 70, Thomson Reuters data showed. The index was at 92.4 on Friday.

 It is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 20.9 times,
compared with 13.2 for all o fAsia and 12.2 for global emerging markets, Thomson Reuters StarMine data showed.

 Market turnover was 2.6 billion rupees ($23.3 million), more than four times the 2009 average. Foreign investors sold a net 282.7 million rupees in shares and they have overall sold 17.5 billion rupees' worth this year.

 The rupee LKR= hit a near 22-month high of 111.65/70 from Wednesday's 111.72/75 as exporters sold dollars after the central bank paid a 20-cent one-month forward premium in a swap. The forward premium had been 5 cents in recent days.

 FACTORS TO WATCH:
  •  Extent of the technical correction
  •  Whether the rupee appreciates beyond market expectations
  •  Tax reforms promised by the government and how it proceeds with fiscal reforms agreed with the IMF
source -  www.reuters.com

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