July 13, 2018 / 12:22 PM / 5 months ago

Sri Lankan shares extend gains to 2-week closing high

COLOMBO, July 13 (Reuters) - Sri Lankan shares rose for a fourth straight session on Friday and posted their highest close in two weeks as investors bought banking and diversified stocks, stockbrokers said.

But a lack of supportive news amid concerns over political uncertainty capped the upside, analysts said.

The Colombo stock index ended 0.32 percent higher at 6,138.08, its highest close since June 29. It rose 0.5 percent this week, its first weekly gain in eight weeks.

“Market sustained its momentum. Local investors have got activated and they are buying on valuations,” said Hussain Gani, deputy CEO, Softlogic Stockbrokers.

Turnover stood at 626 million rupees ($3.92 million), less than this year’s daily average of 900.5 million rupees.

The benchmark stock index hit its lowest close since March 30, 2017 on July 4, and has declined for 19 sessions in 26 through Friday.

A downward revision in economic growth estimate by the central bank has hit sentiment, analysts said.

Economic growth in 2018 is likely to be between 4 percent and 4.5 percent, falling short of an earlier estimate of 5 percent, Central Bank Governor Indrajit Coomaraswamy told reporters last Friday, adding that the earlier estimate was “ambitious”.

Foreign investor net sold equities worth 4 million rupees on Friday, extending the year-to-date net foreign sale to 2.4 billion rupees.

Shares in Lion Brewery (Ceylon) Plc rose 8.9 percent, Nanda Investment Plc ended 12.4 percent higher, Cargills (Ceylon) Plc climbed 1.8 percent and conglomerate John Keells Holdings Plc gained 0.4 percent.

Investors are waiting for some positive news both on the economic and political front, said analysts, adding that the government’s policy implementation had been sluggish since both main parties in the ruling coalition lost local polls in February.

The International Monetary Fund said on June 20 that Sri Lanka’s economy remained vulnerable to adverse shocks because of sizable public debt and large refinancing needs. ($1 = 159.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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