July 12 (Reuters) COLOMBO- Sri Lankan shares hit their highest close in over a week on Thursday as investors bought banking and beverage shares, stockbrokers said.
Many market participants remained on the sidelines due to a lack of bullish news amid concerns over political uncertainty, analysts said.
The Colombo stock index ended 0.43 percent higher at 6,118.80, its highest close since July 2.
“We see local investors returning to the market as the prices are attractive to them,” said Dimantha Mathew, head of research, First Capital Holdings.
“Though the foreign selling is there, it has slowed down a bit and we expect the foreign outflows to continue for a few more weeks due to the global situation.”
Turnover stood at 586 million rupees ($3.68 million), less than this year’s daily average of 902.7 million rupees.
The index on July 4 hit its lowest close since March 30, 2017, and has declined for 19 session in 25 through Thursday.
It dropped 1.4 percent last week, sliding for a seventh straight week.
Lower economic growth outlook has also hit sentiment after the central bank cut its estimate, 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 on Friday, adding that the earlier estimate was “ambitious”.
Foreign investor are selling and concerns about lower economic growth weighed on sentiment, analysts said.
They net sold equities worth 116.3 million rupees on Thursday extending the year-to-date net foreign sale to 2.4 billion rupees.
Shares in Ceylon Tobacco Company Plc ended 1.7 percent higher, while Hatton National Bank Plc ended 1.3 percent up and Commercial Bank of Ceylon Plc closed 0.9 percent higher.
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.