Stocks end at near 3-week low in thin trade

Reuters: Shares ended at a near three-week low yesterday, led by large cap shares in a light trading session, as investors looked for fresh cues from political and economic fronts.

The Colombo stock index ended 0.26% weaker at 6,506.74, its lowest since April 2016. The index lost 0.37% during the week, its second straight weekly fall.

“The market was down primarily on CTC (Ceylon Tobacco Company PLC). It fell in low volumes and dragged the market. Other shares ended flat with most of the investors still on the sidelines awaiting direction,” said First Capital Holdings Research Head Dimantha Mathew.

Shares in Ceylon Tobacco Company PLC ended 2.6% lower while Lanka ORIX Leasing PLC fell 2.7%.

Conglomerate John Keells Holdings PLC ended 0.1% down, and Dialog Axiata PLC closed steady.

Analysts said depreciation of the rupee also weighed on the sentiment as it is likely to dent the profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low on 2 May on importer demand for the US currency, dealers said, but recovered after the Central Bank intervened in the market.

Fitch Ratings said on Thursday (3 May) that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22.

Turnover stood at Rs. 386.4 million ($2.45 million), around a third of this year’s daily average of Rs. 1.04 billion.

Foreign investors bought a net Rs. 34.8 million worth of equities yesterday, but the market has seen a net foreign outflow to Rs. 587.9 million worth of equities so far this year.