The Fed decision to keep the rates steady did not affect CSE positively  as sell off in the global markets continued while the ASI was down 1% on 16th June. Turnover during the past few trading days have been thin. The CSE has seen similar times in the past but investors and traders are more cautious with the news about Capital Gains Taxes making rounds. Although the PM has made a vague statement that it will be introduced, there have been no details as usual to give clarity to investors. The market needs details, and the lack of it is leading participants to make their own assumptions and thereby creating panic and fear.

Another developing news that was coming in was the complete removal of the ban on fish imports from Sri Lanka by the European Union. It is unsure if this news can be treated positive for the market when it opens on 17th. Corporate earnings have seen improvement, while valuations are seen as attractive by even foreign institutions but they have failed to translate into positive price movements yet. In the short term, one concern is the amount of margin used by traders which could trigger margin calls and bring the market down further.

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About Author: LankanInvestor