Reuters: Shares edged down on Thursday, erasing early gains to slip from their highest close in nearly 12 weeks hit in the previous session, led by some illiquid large-caps such as Nestle Lanka Plc and Carson Cumberbatch Plc.

The main stock index fell 0.22%, or 16.08 points, to close at 7,273.69, slipping from its highest close since 27 February hit on Wednesday.

Turnover was Rs. 1.68 billion ($ 12.6 million), well above this year’s daily average of about Rs. 1.14 billion.

“The Bourse dipped at the end of trading mainly due to losses in illiquid large-cap shares. Local participation outweighed foreign activity yet again with institutional and high networth investors buying into banking shares,” said a stockbroker asking not to be named.

“Banking, financing and insurance sectors managed to record the highest turnover for the day,” the source added.

Foreign investors were net sellers on Thursday for a second straight session, offloading Rs. 64.4 million worth of shares on Thursday. But they have been net buyers of 5.94 million rupees worth of stocks so far this year.

A surge of 11.2% in Lanka ORIX Leasing Co Plc and Lion Brewery (Ceylon) Plc ‘s 15% rise was undercut by losses in Nestle Lanka Plc, which fell 1.79 percent, while Carson Cumberbatch Plc declined 13.5%.

The Bourse hit its highest level in 12 weeks on Wednesday, led by financials on expectations of better quarterly earnings.

Political uncertainty due to Prime Minister Ranil Wickremesinghe-led UNP not having a Parliament majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on 15 April.

The index has gained 5.6% since the rate cut through Wednesday.

Rupee forwards end weaker; CB caps fall

Reuters: Rupee forwards ended weaker on Thursday due to importer dollar demand, though the Central Bank prevented any sharp declines in the currency via moral suasion, dealers said.

Actively traded three-month forwards ended at 136.55/70 per dollar compared with Wednesday’s close of 136.40/70.

“Import pressure was there so the three-month (forwards) ended weaker, but due to moral suasion two-month and one-month did not trade,” a currency dealer said on condition of anonymity.

Two-month forwards were unchanged at 135.50/80 per dollar and one-month forwards were steady at 134.70/90, as the central bank prevented the currency from falling sharply.

Central Bank officials were not available for comment.

The Central Bank on Wednesday allowed the spot to fall 20 cents or 0.15%, the fifth downward adjustment since 30 April and a move that dealers said reflected lower domestic interest rates and a broadly strong dollar.

The Central Bank allowed the spot rupee to fall to 133.70 per dollar, a day after it permitted a 20-cent drop to 133.50 on Tuesday, but dealers said the spot did not trade on the day due to moral suasion, preventing deals below 133.70.

The banking regulator has let the spot rupee depreciate 80 cents or 0.6% since 30 April, Thomson Reuters data showed.