Thursday 30 January 2014

Sri Lanka shares fall on large caps, foreign selling after Fed decision

COLOMBO, Jan 30 (Reuters) - Sri Lankan shares fell on Thursday, led by blue chips and large caps and due to foreign selling, following the regional trend a day after the U.S. Federal Reserve further trimmed its monetary stimulus. 

The Fed announced a further $10 billion reduction in its monthly bond buying as it stuck to plans to wind down its extraordinary stimulus despite the recent turmoil across many emerging markets. 

The main stock index lost 0.4 percent, or 24.88 points, to 6,227.26. The fall was led by a 1.93 percent loss in market heavyweight Ceylon Tobacco Company Plc and a 3.16 percent fall in Cargills (Ceylon) Plc. 

Shares in John Keells Holdings lost 0.29 percent to end at 240 rupees, a day after it posted a 17 percent year-on-year gain in its December-quarter net profit. 

Foreign investors were net sellers of 216.5 million rupees ($1.66 million) worth of shares on Thursday, but bourse has witnessed net inflow of 823.5 million rupees so far this year. 

They bought 22.88 billion rupees of stocks last year. 

Stockbrokers said local retail and institutional investors were active in markets after interest rates in treasury bills eased at a weekly auction on Wednesday to multi-year lows, making fixed-income assets unattractive. 

The index has been in an overbought region since Jan. 7, Thomson Reuters data shows. 

It has risen 5.32 percent so far this year, following a 4.8 percent gain in 2013, after having fallen in the previous two years. 

The day's turnover was 808 million rupees, less than last year's daily average of about 828.4 million rupees. 

($1 = 130.7300 Sri Lanka rupees)

(Reporting by Shihar Aneez; Editing by Anupama Dwivedi)

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