Stock market hit near 10-mth closing low

Reuters: Stocks closed at their lowest in nearly 10 months on Tuesday, dragged down by banking and telecom shares, as concerns over rising interest rates and ongoing political instability weighed on sentiment.

The Colombo stock index ended 0.45% lower at 6,134.41, its lowest close since 4 April.

“Not much of activities as the current uncertainty is hurting investor sentiment despite the current (price) levels being attractive,” said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities Ltd.

Foreign investors net bought Rs. 8.06 million (about $ 53,751) worth of equities on Tuesday, but they have net sold Rs. 1.37 billion worth of shares so far this year. Turnover stood at Rs. 207.5 million, the highest since 18 January.

Shares in mobile phone operator Dialog Axiata Plc fell 3.64%, while Ceylinco Insurance Plc lost 5% and market heavyweight John Keells Holdings slipped 0.86%.

Rising market interest rates, which move in tandem with t-bill yields, have been a cause for concern, brokers said. Yields on treasury bills rose 1-16 basis points at a weekly auction last Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee.

Investors are also concerned about possible political uncertainty as the main coalition partners in the government are contesting local polls separately, analysts said.