Shares down fourth week running, foreign inflow slows

Negative sentiment continued to cloud domestic equities, with equity markets losing steam for the fourth consecutive week as the benchmark ASPI lost ~74 points week-on-week (compared to the ~98 point decline the previous week and the ~3 point loss the week prior), Zcuity Stockbrokers said in their Share Market Weekly.

"Institutional, HNI and Foreign interest which had been supporting Index gains over Q2’17 also waned this week, with crossings in three stocks (JKH, GLAS & NEST) accounting for just 30% of total market turnover," the report noted.

"Heavy trading in JKH (crossings in JKH accounted for ~82% of total crossings and 25% of total market turnover) failed to stimulate markets and average turnover levels for the week consequently fell to LKR 0.45Bn, ~36% lower than the previous week’s average of LKR 0.70Bn."

Acuity said that foreign inflows to the bourse also slowed last week, with net foreign flows falling ~77% over the week to record a paltry LKR198Mn.

Compared to the 11.3% gain on the Index in the second quarter of this year, markets have fallen ~3.8% in the first half of the third quarter, halving the year-to-date gain on the Index to 4.8% cf. the gain of 8.9% in the first half of this year, the report said.

Acuity expected markets this week to continue to take cues from the incoming corporate earnings releases with some pressure from profit taking also likely.

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