Wednesday, December 5, 2012

REFILE-Sri Lankan stocks slip, foreign buying boosts turnover

Dec 5 (Reuters) - Sri Lankan stocks ended weaker for a fourth straight session on Wednesday, hitting a three-month low as high interest rates weighed on sentiment.

The Colombo Stock Exchange's main index ended 0.15 percent, or 8.24 points, weaker at 5,323.21, its lowest close since Sept. 3.

The central bank on Wednesday rejected all bids for 91-day T-bills at a weekly auction, which analysts saw as a move to hold down interest rates, though yields for 364-day T-bills rose for an eighth straight week.

"The central bank might have felt that now it's not necessary for the rates to go up," a fund manager said on condition of anonymity.

Analysts say investors have been shifting to fixed deposits from equities since the central bank kept key policy rates at three-year highs on Nov. 9.,

Foreign buying accounted for 83.5 percent of the day's 871 million rupees ($6.78 million) turnover. Foreign investors bought a net 701.9 million rupees worth of shares, extending the net foreign inflow this year to 36.3 billion rupees.

The rupee closed a tad weaker at 128.50/70 to the dollar compared with Tuesday's close of 128.30/40 on importer dollar demand, dealers said.

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