Reuters: Shares snapped a five-session losing streak on Tuesday and recovered from their lowest close in more than two months hit in the previous session after the Government gave some clarity on the specific duties of each ministry.

Despite parliamentary elections ending in August and the appointment of the Cabinet early this month, the Government had until Tuesday failed to announce the institutions and their role under each ministry, leading to uncertainty among investors.

The Government notification through the gazette and some foreign interest in stocks boosted sentiment, brokers said.

The main stock index ended 0.2% up at 7,118.38, edging up from its lowest close since July 15 hit on Monday.

“Investors were waiting for some kind of positive news. The gazette notification with subjects and functions of each ministry has given some kind of clarity to the market,” said a stockbroker asking not to be named.

However, a weaker rupee and upward pressure on interest rates weighed on sentiment.

The rupee fell 0.11% on Tuesday to a fresh low of 141.00 per dollar due to importer demand for dollars, while exporters held on to the greenback on expectations of further depreciation.

Turnover was Rs. 806.4 million ($ 5.72 million), compared with the daily average of Rs. 1.11 billion. The turnover has been mostly about half of this year’s daily average since 31 August, stock exchange data showed.

Analysts said investors were waiting to see how the Government would bridge the budget deficit and where the revenue would come from, in its November budget.

The weak rupee curbed investor risk appetite and rising market interest rates also hit sentiment, with t-bill yields at their highest level in more than five months at the last auction.

Foreign investors were net buyers of Rs. 30.6 million worth of shares on Tuesday, but they have been net sellers of Rs. 2.96 billion so far this year.

Shares of Lanka ORIX Leasing Company Plc jumped 5.99% while conglomerate John Keells Holdings Plc rose 1.33%.

Rupee hits record low on importer dollar demand

Reuters: The rupee fell 0.11% on Tuesday to an all-time low due to importer demand for dollars, while exporters held on to the greenback on expectations of further depreciation.

The rupee hit a life-time low of 141.00, surpassing its previous low of 140.98 hit on 17 September.

Dealers said the currency recovered slightly as a State bank, through which the Central Bank usually directs the market, sold dollars at 140.98 per dollar to limit the fall.

The spot rupee ended at 140.95/141.05 per dollar, weaker from Monday’s close of 140.85/90. It has fallen 4.4% since the Central Bank effectively floated it on 4 September.

“It looks like the Central Bank’s desired level is 141.00,” said a currency dealer, asking not to be named.

“Exporters were reluctant and waiting, they expect the currency to depreciate further.”

Officials from the Central Bank were not immediately available for comment.

The market expects the currency to fall further in the short term if the Central Bank fails to tighten interest rates or the country does not see strong inflows soon, some dealers said.

The rupee float has won a thumbs-up from rating agencies and economists, but more reforms will be needed to support the currency and conserve the Central Bank’s modest reserves.

In a bid to curb dollar outflows on vehicle purchases, the Central Bank on 15 September imposed a 70% limit on loans and advances for vehicles, a move seen aimed at easing demand for credit and stemming dollar outflows.