Sri Lanka shares end higher after surprise interest rate cut
Sri Lankan shares rose 0.7% to 16,473.4 after the central bank's surprise 25 basis points interest rate cut aimed at boosting economic growth. Despite the positive market response, analysts suggest a potential correction later in the year depending on inflation trends. Nation Lanka Finance and SMB Finance were the top gainers, with trading volume increasing significantly. Foreign investors were net buyers, while domestic investors sold off shares.
May 22 (Reuters) - Sri Lankan shares closed higher on Thursday, aided by gains in communication services and utilities stocks.
* The CSE All Share index .CSE settled up 0.7% at 16,473.4.
* Sri Lanka's central bank cut the policy rate by 25 basis points in a surprise move earlier in the day, aiming to foster stronger economic growth after a lingering financial crisis and buffer any fallout from potential U.S. tariffs.
* The cut is unlikely to generate a major market response; however, market players may expect a correction towards the end of the year depending on how inflation settles following the third quarter, says Raynal Wickremeratne, co-head of research at Softlogic Stockbrokers.
* Nation Lanka Finance CSF.CM and SMB Finance SEMB.CM were the top percentage gainers on the CSE All Share index, up 100% and 50%, respectively.
* Trading volume on the CSE All Share index rose to 277.3 million shares from 171 million in the previous session.
* The equity market's turnover rose to 4.54 billion Sri Lankan rupees ($15.17 million) from 2.43 billion rupees in the previous session, according to exchange data.
* Foreign investors were net buyers, purchasing stocks worth 606.4 million rupees, while domestic investors were net sellers, offloading shares worth 4.25 billion rupees, the data showed.
* For a report on global markets, click MKTS/GLOB
($1 = 299.2500 Sri Lankan rupees)
