COLOMBO, Jan 6 (Reuters) - Sri Lankan stocks fell on Monday, snapping six straight sessions of gains, despite foreigners buying risky assets from an over-bought bourse.
The main stock index slipped 0.48 percent or 28.81 points to 5,944.99. It had touched a 11-week closing high of 6,007.79 on Friday, gaining 1.65 percent last week.
"It is a slow start. People are still getting in with not much of activity," a stockbroker said on condition of anonymity. However, stockbrokers said, there has been demand for select stocks, but they were not available in required quantity.
They expect the market to gain in high turnover due to reduction in the market interest rate.
The central bank slashed the standing lending facility rate or reverse repurchase rate by 50 basis points to a multi-year low of 8.00 percent on Thursday, in a move to reduce commercial banks' interest rate spreads.
The day's turnover was 462.2 million rupees, less than last year's daily average of about 828.4 million rupees. Shares in Ceylon Tobacco Company PLC fell 0.16 percent to 1,186.30 rupees, while conglomerate John Keells Holdings fell 0.61 percent to 227.50 rupees a share.
The index's 14-day relative strength index, which was in an over-bought region, fell to neutral territory, Thomson Reuters data showed. The index gained 4.8 percent in 2013 after losses in the previous two years, giving a return of 2.18 percent in dollar terms.
Many investors locked their funds in risk-free debentures instead of risky assets due to a sluggish bourse amid falling interest rates.
Foreign investors bought 70.6 million rupees ($540,200)worth of shares on Monday after buying a net 22.88 billion rupees worth of stocks last year, compared with a record 38.68 billion rupee net foreign inflow in 2011.
($1 = 130.7000 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)
Source: http://in.reuters.com
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