Feb 5 (Reuters) - Sri Lankan shares recovered on Thursday from a more-than-five-month low hit in the previous session, on bargain-hunting in financials and telecom stocks as foreign investors bought into the island nation's risky assets.
The main stock index ended up 0.67 percent, or 47.25 points, at 7,047.31. On Monday, it had its lowest level since Aug. 28, on concerns over a retrospective tax announced in the supplementary budget.
Stock and forex markets were closed on Tuesday for a Buddhist religious holiday and on Wednesday for Independence Day.
Net foreign inflows hit a near-three-month high of 967.8 million rupees ($7.32 million) on Thursday, bringing the year-to-date net inflow to 907.7 million rupees. Foreign investors bought a net 22.07 billion rupees worth of stocks last year.
"Relentless buying drove the market up. There was huge buying momentum when investors saw the market is turning around," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.
Shares in leading mobile phone operator Dialog Axiata Plc jumped 7.14 percent while conglomerate John Keells Holdings Plc rose 0.60 percent.
Shares in Ceylinco Insurance Plc rose 4.49 percent, Hatton National Bank Plc rose 3.06 percent and biggest listed lender Commercial Bank of Ceylon Plc gained 0.81 percent.
Turnover was 2.35 billion rupees, its highest since Jan. 12 and well above last year's daily average of 1.42 billion rupees, exchange data showed.
The index fell 5.1 percent in the two sessions through Monday after the new government announced a budget that imposed a one-time 'super gain tax' of 25 percent on companies or individuals who earned over 2 billion rupees profits in 2013/2014.
Analysts expect the market to be on a falling trend due to worries over the 'super gain tax', which could have an impact on listed firms like John Keells Holdings, Dialog Axiata, Sri Lanka Telecom, Ceylon Tobacco Co, and Nestle as they would have to pay the new tax. ($1 = 132.2000 Sri Lankan rupees)
The main stock index ended up 0.67 percent, or 47.25 points, at 7,047.31. On Monday, it had its lowest level since Aug. 28, on concerns over a retrospective tax announced in the supplementary budget.
Stock and forex markets were closed on Tuesday for a Buddhist religious holiday and on Wednesday for Independence Day.
Net foreign inflows hit a near-three-month high of 967.8 million rupees ($7.32 million) on Thursday, bringing the year-to-date net inflow to 907.7 million rupees. Foreign investors bought a net 22.07 billion rupees worth of stocks last year.
"Relentless buying drove the market up. There was huge buying momentum when investors saw the market is turning around," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.
Shares in leading mobile phone operator Dialog Axiata Plc jumped 7.14 percent while conglomerate John Keells Holdings Plc rose 0.60 percent.
Shares in Ceylinco Insurance Plc rose 4.49 percent, Hatton National Bank Plc rose 3.06 percent and biggest listed lender Commercial Bank of Ceylon Plc gained 0.81 percent.
Turnover was 2.35 billion rupees, its highest since Jan. 12 and well above last year's daily average of 1.42 billion rupees, exchange data showed.
The index fell 5.1 percent in the two sessions through Monday after the new government announced a budget that imposed a one-time 'super gain tax' of 25 percent on companies or individuals who earned over 2 billion rupees profits in 2013/2014.
Analysts expect the market to be on a falling trend due to worries over the 'super gain tax', which could have an impact on listed firms like John Keells Holdings, Dialog Axiata, Sri Lanka Telecom, Ceylon Tobacco Co, and Nestle as they would have to pay the new tax. ($1 = 132.2000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)
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