Sri Lanka shares fall on profit taking on thin volumes

Nov 06, 2008 (LBO) – Sri Lankan shares slumped Wednesday after several days of gains on thin volumes as investors took profits, with brokers saying the volatility could deter investors.

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The All Share Price Index fell 2.58 percent (50.62 points) to 1,911.58 while the Milanka Price Index was down 3.24 percent (72.17 points) to 2,152.58. Turnover was only 86 million rupees.

“There was a little bit of profit taking today,” said Geeth Balasuriya of HNB Stockbrokers.

“In the last two or three days there was some speculative trading and the market went up quite sharply on thin volumes which is not a good sign because then it will not consolidate at any level.”

Brokers said plantations stocks, which rallied Wednesday, also came down sharply.

Sri Lanka Telecom was down 4.17 percent (1.75 rupees) to 40.25 while Dialog Telekom ended flat at 7.75 rupees.

John Keells Holdings, the second most actively traded stock, fell 2.78 percent (two rupees) to 70 rupees while Distilleries Company fell 3.88 percent (2.25 rupees) to 55.75.

Lanka Cement was the most actively traded stock for the second day running, with the share ending down 50 cents at nine rupees and 352,400 shares changing hands.

Brokers said the market volatility was not healthy and could deter investors because of the risk.