Reuters: Sri Lanka’s stock market fell on Monday to its lowest in more than three weeks as concerns over interest rates and the volatile rupee currency kept investors on the sidelines.
The Colombo Stock Exchange’s main index edged down 0.07 per cent or 3.58 points to 4,925.06, its lowest since 13 June.
“Many investors were waiting for direction on interest rates and the rupee with a gloomy economic outlook,” said one stockbroker.
Analysts said investor uncertainty over further depreciation of the rupee currency, and the risk of an increase in interest rates, have hit the bourse, which has fallen 18.9 per cent since the start of the year, while the rupee has lost 14 per cent.
The day’s turnover was Rs. 125.1 million ($937,400), its lowest since 2 July, and well below this year’s daily average turnover of Rs. 952.8 million.
Foreign investors were net sellers of 8.46 million rupees worth of shares on Monday, but have been net buyers of Rs. 23.5 billion worth shares so far this year.
The rupee meanwhile closed weaker at 133.50/60 from Friday’s close of 133.30/50, on light importer dollar demand.
Dealers said heavy oil bills may threaten the stability of the rupee, though it could appreciate in the near future due to exporter demand.
Sri Lanka’s central bank has taken several stringent policy measures this year aimed at cutting imports, including raising policy rates and restricting credit growth, though a prolonged drought has increased oil imports for thermal power.
source - www.ft.lk
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