Reuters: Sri Lankan share index rose for a second straight session on Friday, as retail investors bought financial stocks, but brokers said the rally will be short lived due to volatile global markets and rising returns in risk free assets.
The gains helped the index recover further lost ground from its lowest close in more than 20 months hit on Wednesday.
The main stock index ended 0.51 percent or 32.53 points up at 6,382.24, its highest close since Jan. 14.
It had lost 4.5 percent in a four-session losing streak through Wednesday as some investors sold their holdings to settle margin calls, while others switched to treasury bills amid rising debt yields.
"We saw a bit of recovery today also. But I don't think it'll sustain. We are at a stage where the market is trying to consolidate, but it is difficult," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.
Sri Lankan stocks have fallen over 7 percent so far this year as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.
Foreign investors were net sellers of 157.7 million rupees ($1.1 million) worth of equities on Friday extending the year-to-date net foreign outflow to 2.27 billion rupees.
The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.
Some market analysts expect a rate hike in the central bank's January monetary policy rate decision scheduled at 1400 GMT on Monday.
Shares in Commercial Bank of Ceylon Plc, the country's biggest listed lender, rose 2.36 percent, while conglomerate John Keells Holdings Plc rose 0.83 percent. ($1 = 143.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)
The gains helped the index recover further lost ground from its lowest close in more than 20 months hit on Wednesday.
The main stock index ended 0.51 percent or 32.53 points up at 6,382.24, its highest close since Jan. 14.
It had lost 4.5 percent in a four-session losing streak through Wednesday as some investors sold their holdings to settle margin calls, while others switched to treasury bills amid rising debt yields.
"We saw a bit of recovery today also. But I don't think it'll sustain. We are at a stage where the market is trying to consolidate, but it is difficult," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.
Sri Lankan stocks have fallen over 7 percent so far this year as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.
Foreign investors were net sellers of 157.7 million rupees ($1.1 million) worth of equities on Friday extending the year-to-date net foreign outflow to 2.27 billion rupees.
The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.
Some market analysts expect a rate hike in the central bank's January monetary policy rate decision scheduled at 1400 GMT on Monday.
Shares in Commercial Bank of Ceylon Plc, the country's biggest listed lender, rose 2.36 percent, while conglomerate John Keells Holdings Plc rose 0.83 percent. ($1 = 143.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)
