CSE slips; turnover slumps to over 1-month low

Thursday, 24 May 2018 00:00 - - {{hitsCtrl.values.hits}}

Colombo (Reuters): Sri Lankan shares slipped to a more than one-week closing low yesterday (23 May), dragged by industrials such as market heavyweight John Keells Holdings.

Turnover slumped to a more than one-month low with investors staying on the sidelines as they waited for some cues about the real impacts of floods, while worries over a weaker rupee, political uncertainty and recent fuel price hike also weighed on sentiment.

The Colombo stock index ended 0.1% weaker at 6,465.48, its lowest close since 15May. Turnover was Rs. 250 million ($1.58 million), the lowest since 18 April, and around a quarter of this year’s daily average of Rs. 983.1 million.

“It was a dull market as local investors are still trying to digest the impact of fuel price hike,” said Softlogic Stockbrokers deputy CEO Hussain Gani. “We expect the market to bounce back next week when investors see some directions.”

Heavy monsoon rains have killed ten people, prompting authorities to warn against landslides and floods in low-lying areas after spill gates had to be opened across the Indian Ocean island.

Foreign investors net sold Rs. 23.5 million worth shares, extending the year-to-date foreign outflow to Rs. 597 million.

Top conglomerate John Keells Holdings fell 0.63%, while large cap Nestle Lanka PLC declined 2.8%.

Stock brokers said investors were waiting for more clarity on the political and economic front amid recent fuel price hike, while the depreciation in rupee also weighed on sentiment.

The rupee hit a fresh low of 158.50 per dollar yesterday on importer demand for the US currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend Parliament last month after 16 legislators from his ruling coalition defected, dented market sentiment.

On 8 May, Sirisena urged his own coalition government and the opposition to end a power struggle to achieve ambitious goals including anti-corruption measures.