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Reuters: The stock index fell for a fourth straight session on Thursday to close at its lowest in more than eight weeks, as concerns over political uncertainty sapped investor confidence for risky assets.
President Maithripala Sirisena’s Government has said it would dissolve Parliament once some crucial reforms, including an electoral bill, are passed, but has yet to fix a date for the election.
The main stock index ended down 0.17%, or 11.93 points, at 7,051.52, slipping to its lowest closing level since 15 April.
“Nothing much is happening and only strategic transactions are taking place. Everybody is on the wait for the elections,” said Dimantha Mathew, Research Manager at First Capital Equities Ltd.
Thursday’s turnover was Rs. 835.7 million ($6.3 million), lower than this year’s daily average of about Rs. 1.1 billion.
Analysts said foreign investors have been selling shares amid expectations the US would hike key interest rates sooner than expected. An upbeat US nonfarm payrolls in May, the largest gain since December, has raised chances for a rate hike as early as September.
Foreign investors were net sellers of Rs. 69.4 million worth of shares on Thursday, extending net foreign outflows to Rs. 1.53 billion in equities in the past 12 sessions.
The Bourse has seen net inflows of Rs. 4.41 billion in equities so far this year.
Stockbrokers said better corporate earnings would help the market gain.
Shares in Nestle Lanka Plc fell 1.39%, while Hayleys Plc dropped 5.71%.
Caltex Lubricant Lanka Plc ended 1.57% lower.
Reuters: The rupee closed steady as a state-run bank continued to sell dollars at 133.80 for the third day on Thursday, even as the Central Bank defended currency forwards via moral suasion, dealers said.
Currency dealers said hopes the rupee would strengthen on rising inflows was fading as the currency has come under pressure after foreign investors too sold rupee bonds on Thursday.
The spot currency ended unchanged at 133.80.
“The state bank continued to sell dollars at 133.80 and there is pressure by foreign bond selling too,” a currency dealer said on condition of anonymity.
Dealers said the Central Bank has persuaded banks to keep the spot at current levels, but officials of the banking regulator were not immediately available to comment on it.
The state-run bank cut the spot rupee’s level by 10 cents to 133.80 on Tuesday after retaining it at 133.90 during the previous five sessions through Monday.
The move came amid tepid dollar sales by exporters and concerns over the continuing political uncertainty, dealers said.
The market expects the rupee to be stable so long as the Central Bank offers dollars, but its stability will depend on the amount of inflows the country is able to get, currency dealers said.
One-week forwards ended steady at 133.95/134.10 per dollar, while actively-traded three-month forwards ended at 135.70/90.
