Reuters: Shares hit a more than one-week closing low on Wednesday as a surprise win for Republican Donald Trump in the US presidential election weighed on sentiment and as investors turned cautious ahead of the national budget on Thursday.

Investors feared a Trump victory could cause global economic and trade turmoil and years of policy unpredictability, which among other things, will discourage the US Federal Reserve from raising interest rates in December as long expected.

The US dollar, Mexican peso and world stocks began to steady in the European morning though, after having been hammered overnight.

Sri Lanka’s 2017 budget plan will seek to boost revenue through a capital gain tax on properties, simplify tax collection and offer incentives to spur exports, though progress will depend on the coalition government agreeing on economic priorities, analysts say.

The benchmark index of the Colombo Stock Exchange ended 0.33% weaker, or down 21.51 points, at 6,417.55, its lowest close since 1 November.

“Primary focus will be on our budget,” said Danushka Samarasinghe, research head at Softlogic Stockbrokers.

“It will take a few weeks for global markets to settle and during that period there could be volatility in our markets also, a trickledown effect of the global funds.”

Turnover stood at rs. 437.2 million ($ 2.96 million), less than this year’s daily average of Rs. 713.3 million.

Foreign investors bought beaten down stocks for a sixth straight session, picking up shares worth a net Rs. 106.03 million. They have net sold Rs. 899.3 million worth of shares so far this year.

Shares in the biggest listed lender, Commercial Bank of Ceylon Plc, fell 1.07%, while Hatton National Bank Plc fell 1.80%.

Conglomerate John Keells Holdings Plc fell 0.66%. ($1 = 147.5000 Sri Lankan rupees). 

Rupee ends firmer on dollar weakness, bank selling

Reuters: The rupee ended firmer on Wednesday as the dollar fell after political outsider Donald Trump sailed to an unexpected victory in the US presidential elections and on conversion of the US currency by exporters, dealers said.

Investors had feared a Trump victory could cause global economic and trade turmoil and years of policy unpredictability, which among other things will discourage the US Federal Reserve from raising interest rates in December as long expected.

The US dollar and stocks were hammered in Asian trade, but began to steady in the European morning on Wednesday as fears of a Brexit-style shock that wiped trillions off global markets has failed to materialise so far.

Rupee forwards were active, with one-week forwards ending at 148.05/15 per dollar, compared with Tuesday’s close of 148.10/15.

“There was some bank (dollar) selling in the market in dull trade,” a currency dealer said, asking not to be named.

Dealers said pressure on the rupee would ease after the national budget scheduled on Thursday and on a pickup in year-end remittances.

Deputy Central Bank Governor Nandalal Weerasinghe said on Tuesday that seasonal demand in November ahead of the budget has resulted in pressure on the rupee, adding the downward trend would be reversed after remittances flow in next month.

Selling of government securities by foreign investors has also hit the rupee, dealers said.

Foreign investors net sold Rs. 24.5 billion ($ 165.6 million) worth of government securities in the three weeks ended 2 November, data from the Central Bank showed.