Colombo, Nov 07: Sri Lankan share prices gained 12.27 percent today in a dramatic rebound on the news President Chandrika Kumaratunga withdrew tough emergency laws, brokers said. The all share price index gained 142 points to close at 1,298.5 with renewed foreign interest in the market, while the Milanka index which measures the movement of blue chips gained 13.66 percent, dealers said.
Foreign buying was 93 million Rupees (USD 989,361) while foreign selling was worth 51 million Rupees.
"Investors rushed when they heard that there was no state of emergency," a top buyer at the Colombo bourse said. "This is music to our ears, the market should fully recover by Monday."
The market had shed 20 percent in the previous two sessions after Kumaratunga sacked three ministers and suspended Parliament Tuesday in the biggest falls recorded on the tiny exchange.
The bourse had emerged as Asia's best gainer this year, recording a 78 percent increase in share values, on the back of a ceasefire between the government and Tamil tiger rebels.
Finance Minister K N Choksy said the fall of the market following Kumaratunga's move against Prime Minister Ranil Wickremesinghe's government had shattered investor confidence.
Bureau Report