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Sri Lankan shares end steady; investors await cues on interest rates

Sri Lankan shares end steady; investors await cues on interest ratesCOLOMBO: Sri Lankan shares ended steady on Thursday, near six-week lows hit on Wednesday, in dull trade as investors awaited cues on interest rates, stockbrokers said, a day after t-bill yields fell indicating a reversal in rising trend in interest rates.

The main stock index ended little changed, edging up 0.04 percent, or 2.80 points, at 7,046.70, from its lowest close since Feb. 2 hit on Wednesday. It had lost 3.74 percent in the last 13 sessions through Wednesday.

Analysts expect the index to gain on hope that interest rates might gradually come down after yields in t-bills fell between 31 basis points and 44 at a weekly auction on Wednesday after they spiked between 112 basis points and 124 in the two previous weekly auctions.

“We don’t expect much to happen in the coming week as everybody is on a wait and see mood and not much of activity is taking place,” said Dimantha Mathew, manager of research at First Capital Equities (Pvt) Ltd.

The day’s turnover stood at 330.3 million rupees ($ 2.5 million), around a quarter of this year’s daily average of 1.26 billion rupees.

Foreign investors were net buyers of 67.9 million rupees worth of shares, extending the year-to-date foreign inflow to 3.29 billion rupees.

The central bank on Wednesday said the low interest rate environment is expected to continue benefiting from lower inflation while keeping the policy rates steady.

Shares in biggest listed lender Commercial Bank of Ceylon Plc rose 1.71 percent, while conglomerate John Keells Holdings Plc gained 1.32 percent.

Infrastructure firm Access Engineering fell 3.23 percent after Sri Lanka’s new government cancelled an $ 85 million runway project awarded by the previous government.

Copyright Reuters, 2015

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