Heavy retail buying on Friday drove Sri Lanka's stock market higher for a sixth session and deeper into overbought territory, while the rupee ended down on importer dollar demand. The island's main share index rose 1.21 percent or 82.23 points to 6,891.96, its highest close since October 5, and has gained 3.9 percent in the last six sessions.
It has been Asia's best performer with 3.86 percent gain in the first week of 2011 after being the top performer last year with a 96 percent gain. Local LP gas distributor Laugfs Gas jumped 20.5 percent, while conglomerate Richard Pieris gained 1.5 percent. Both of them were the top traded shares by turnover, Reuters data showed.
Friday's turnover was 4.1 billion rupees ($37 million), well above the 2010 daily average of 2.4 billion rupees. Foreign investors were net sellers for the fifth session in a row with 35.3 million rupees on Friday, extending the net outflow to 1.1 billion rupees in 2011. They sold 26.4 billion rupees last year.
The traded share volume was at 304 million, against a five-day and 30-day average of 73.8 million and 57.7 million respectively. The 90-day average volume is 65 million. Last year's daily average volume was 69.2 million. The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.7, the highest among emerging markets, compared with 13.4 in Asian markets and 12.4 in global emerging markets, Thomson Reuters StarMine data showed. It's 14-day relative strength index is at 76.8, beyond the overbought limit of 70. Sri Lanka's rupee closed weaker at 110.85/88 a dollar from Thursday's two-year high of 110.82/83, on slightly higher importer dollar demand, currency dealers said. The rupee rose 3.07 percent in 2010.