Sri Lanka's stock market edged down on Friday for the second straight session on retail profit taking in thin volume as foreign funds continued to exit the overbought and expensive market. The island's main share index closed 0.26 percent or 18.62 points weaker at 7,192.49, its third fall this year. It hit a record closing high of 7,261.37 on Monday after touching a new intraday peak of 7,320.22 points.
The traded share volume was 81.5 million, the lowest since January 3, against a five-day average of 139.5 million. Last year's daily average volume was 69.2 million. The bourse has been Asia's best performer with an 8.39 percent gain in 2011 after being the top performer last year with a 96 percent return.
The recent retail buying has pushed it deeper into the overbought region with the 14-day relative strength index at 74. The bourse is trading at a forward price-to-earnings (P/E) ratio of 18, highest among emerging markets, compared with 13 in Asian markets and 11.9 in global emerging markets, Thomson Reuters StarMine data showed.
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