COLOMBO: Sri Lankan stocks rebounded on Wednesday from a near-seven month low in light trading volume led by retail buying in battered small caps, but selling pressure continued with speculative trading amid margin calls that forced selling and low liquidity.
Sri Lanka's main share index inched up 0.22 percent or 15.32 points to 6,878.15. It had shed 6.9 percent so far in June alone, but is still up 3.65 percent so far this year.
It was the Asia Pacific's top performer in 2010 and 2009 with 96 percent and 125 percent returns, respectively.
"The indices remained volatile during the day with a majority of the large cap counters losing value," John Keells Stockbrokers said in a research note.
Forced selling by brokers continued in line with the policy of the regulator Securities and Exchange Commission (SEC) to recover credits, while over 6 billion rupees has been locked up in the two recent initial public offerings.
Foreign investors were net sellers of 346.7 million rupees worth of shares on Wednesday, and have sold a net 7.17 billion rupees in 2011 after a record 26.4 billion in 2010.
The day's turnover was 2.9 billion Sri Lankan rupees ($26.4 million), more than last year's average of 2.4 billion and this year's daily average of 2.86 billion.
Traded volume was 85 million, against a five-day average of 101.2 million. The 30-day and 90-day average trading volumes were 188.4 million and 105.1 million, respectively. Last year's daily average was 67.9 million.
The rupee closed firmer at 109.58/60 a dollar from Tuesday's 109.69/70 as the central bank lowered its dollar trading band by 10 cents to 109.00/60 from 109.10/70, dealers said.
Copyright Reuters, 2011
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