Tuesday 2 September 2014

Sri Lanka stocks slip; Keells, Dialog Axiata lead decline

(Reuters) - Sri Lankan stocks slipped for a second straight session on Tuesday, moving further away from a more than three-year high hit on Friday, led by conglomerate John Keells Holdings Plc and Dialog Axiata Plc .

The main stock index fell 0.09 percent, or 6.07 points, to close at 7,024.82. It rose to a more than three-year high of 7,034.09 on Friday.

"The market was dragged by Keells and Dialog shares. It will be slow for a while before it sees the next rally," said a stockbroker asking not to be named.

The index has gained nearly 18.81 percent so far this year. Analysts said low interest rates and continued foreign buying into risky assets had boosted sentiment.

The bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 73.321 on Tuesday, Thomson Reuters data showed.

Stocks are deemed "overbought" above the 70-mark, which tends to signal a reversal in the near term.

Market heavyweight John Keells Holdings Plc, which led the overall fall in the index, fell 0.76 percent to 247.6 rupees, while Dialog Axiata Plc fell 1.77 percent to 11.30 rupees.

Tuesday's turnover stood at 1.09 billion rupees ($8.37 million), slightly below this year's daily average of 1.2 billion rupees.

Foreign investors were net buyers of 21.3 million rupees worth of shares on Tuesday, extending the year-to-date net foreign inflows to 8.26 billion rupees.

($1 = 130.1800 Sri Lankan rupee) 

(Reporting by Ranga Sirilal; Editing by Anupama Dwivedi)

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