Shares mark 2-week closing low; trade dull

Reuters: Sri Lankan shares marked their lowest close in two weeks yesterday with investors mostly keeping to the sidelines, awaiting cues about the real impact of the floods that hit the island nation over the past week.

A weaker rupee, political uncertainty and the recent fuel price hike also weighed on sentiment, brokers said.

The Colombo stock index ended 0.22% weaker at 6,453.41. It fell 0.4% last week.

Turnover was Rs. 397.4 million ($2.52 million), less than a half this year’s daily average of Rs. 977.4 million.

“It was a dull day with holiday-sandwiched Monday. Turnover was very low and we might see the real activities after Wednesday,” said Softlogic Stockbrokers Deputy CEO Hussain Gani. “The investors are waiting to see the full impact of the floods.”

Sri Lanka’s stock and rupee markets will remain closed today as it is a Poya day, and normal trading will resume tomorrow.

Heavy monsoon rains have killed 24 people, prompting authorities to warn against landslides and floods in low-lying areas after spill gates had to be opened across the island, forcing over 70,000 out of their houses.

Foreign investors who were net buyers of Rs. 214.1 million worth of equities so far this year were net sellers of Rs. 58.2 million worth of shares yesterday.

Shares of Distillers Company of Sri Lanka PLC ended 1.8% down, while Sri Lanka Telecom PLC dropped 3.5%.

Stock brokers said investors were awaiting clarity on the political and economic front amid the recent fuel price hike, while the depreciation in the rupee also weighed on sentiment.

The rupee hit a fresh low of 158.50 per dollar on 16 May on importer demand for the US currency.

Analysts said market sentiment had been dented by concerns over political instability following President Maithripala Sirisena’s decision to suspend Parliament last month after 16 legislators from his ruling coalition defected.

On 8 May, Sirisena urged his own coalition Government and the Opposition to end a power struggle to achieve ambitious goals including anti-corruption measures.