Sri Lanka's share market gained to hit a new all-time closing high on Tuesday on heavy retail buying, while foreign investors were net sellers. The island's main share index touched a new intraday high of 7,416.92 before closing at 0.05 percent or 3.94 points firmer at a record close of 7,385.04.
It has been Asia's best performer with an 11.3 percent gain in 2011 after being the top performer last year with a 96 percent return. Recent retail buying has pushed it deeper into the overbought region with the 14-day relative strength index at 81.
Analysts said the bourse will gain further on low interest rates and property prices, though the recent gains in some stocks were not fundamentally warranted. The central bank kept its policy rates unchanged at six-year lows as expected on Tuesday.
Foreign investors sold a net 131.5 million rupees' worth shares on Tuesday and they have sold a net 3 billion rupees so far in 2011, after selling a record net 26.4 billion in 2010.
Traded share volume was 131.3 million, against a five-day average of 119.65 million. The 30-day and 90-day average trading volumes were 94.8 million and 71.3 million respectively. Last year's daily average volume was 69.2 million.
The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.3, one of the highest among emerging markets, compared with 12.9 in Asian markets and 11.9 in global emerging markets, Thomson Reuters StarMine data showed. Turnover was 4.4 billion rupees ($39.5 million), more than this year's daily average 3.8 billion rupees and the last year's 2.4 billion rupees. The rupee closed steady at 110.98/111.00 a dollar, dealers said.