Sharp rally in Bourse

In a growing sign of market and investor confidence in the latest political developments, the Stock Market rose sharply by 2.70 percent and crossed the 6,000 bar yesterday.

The Bourse has shown an upward momentum in the last few days, indicating a positive reaction by investors to changes in the political landscape. The All Share Price Index (ASPI) closed yesterday at 6,114.13 showing a 2.70 percent increase. S&P SL20 liquid stocks ended a sharp 4.66 percent higher, up 143.58 points to 3,227.66. The Market turnover was Rs. 1.5 billion. This was considerably more than the daily average of Rs.789 million this year.

Reflecting the positive sentiments, the bourse ended in green mainly due to the contributions by big cap JKH and DIST, recording a near two months high and the highest intraday surge since June 2012. ASPI witnessed a continuous upward trend during the day reaching an intraday high of 6,123 prior to close the day at 6,114, gaining 161 points.

Both turnover and volumes have increased while nearly 29 percent of turnover was derived from HNB. A net foreign outflow was witnessed with moderate foreign participation but this was offset by heightened activity by local investors.

Many Stock Market analysts said the Bourse’s performance indicated that investors were confident of seeing political stability with the formation of a single-party Government. Many analysts and investors were also taking note of the new Finance Minister’s first speech at the Finance Ministry where he outlined the new Government’s economic vision. Yesterday, the Colombo Stock Exchange was also buoyed by indications that Parliament could be reconvened earlier than expected. Analysts expect even bigger gains next week.

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