* Market heavyweight John Keells boosts overall index
* Foreign fund inflow for the first time in 10 sessions
* Rupee steady on state bank protection
COLOMBO, July 5 (Reuters) – Sri Lanka’s stock market recovered from a six-month low on Tuesday led by 3.8 percent rise in heavyweight John Keells Holdings with foreign inflow for the first time in 10 sessions as institutional investors bought battered shares.
Sri Lanka’s main share index gained 0.68 percent or 46.05 points to 6,862.79. Monday’s close was its lowest close since Jan. 6. Since June 1, the bourse had shed 7.1 percent mainly due to forced selling, in line with the policy of the regulatorSecurities and Exchange Commission (SEC) to recover credits, aiming to eliminate all credit dealing by end 2011.
Over 6 billion Sri Lankan rupees is locked up in two recent initial public offerings. On Monday, the SEC’s Director General Malik Cader said there may be over 30 billion rupees of liquidity locked in private placements and IPOs since February this year.
The day’s turnover was 2.51 billion Sri Lanka rupees ($22.92 million), slightly above last year’s average of 2.4 billion, but below this year’s daily average of 2.82 billion. The bourse is still up 3.42 percent so far this year.
It was the top performer in the Asia-Pacific in 2010 and 2009 with 96 percent and 125 percent returns, respectively.
Foreign investors were net buyers of 28.3 million rupees worth of shares on Tuesday, the first inflow in 10 sessions, and they have sold a 7.54 billion rupees in 2011 after a record 26.4 billion in 2010. Traded volume was 47.4 million, against a five-day average of 63.1 million. The 30-day and 90-day average trading volumes were 179.1 million and 103.2 million, respectively. Last year’s daily average was 67.9 million.
The rupee closed unchanged at 109.49/50 a dollar as a state bank defended the local currency by selling dollars at 109.50 amid heavy importer demand for the greenback, dealers said.
FACTORS TO WATCH:
- Whether foreign investors will buy shares in large volumes.
- Whether Sri Lanka can achieve an 8.5 pct growth target amid rising global oil prices and inflation.
- The extent of the rupee’s appreciation.