Stocks up, rupee loses

Reuters: The Sri Lankan rupee closed weaker for the fifth consecutive session on Tuesday, as security alerts on possible further attacks after the Easter Sunday bombings weighed on investor sentiment, while stocks extended gains into the fifth day after hitting a more than six-year closing low last week.

Sri Lankan officials said on Tuesday that security forces were maintaining a high level of alert after intelligence reports that Islamist militants were planning fresh attacks before the start of Muslim holy month of Ramadan. 

The US ambassador to Sri Lanka said on Tuesday that some of the Islamist militants behind the Easter Sunday bombings that killed more than 250 people were likely still at large and could be planning more attacks. 

The currency fell 0.3% to 176.00/30 per dollar, weaker than Monday’s close of 175.50/90, market sources said. 

Analysts fear it could weaken further due to outflows from stocks and Government securities. 

The island’s currency lost 0.8% last week, but is up 4.1% so far this year, as exporters converted dollars amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January. 

Foreign investors bought a net Rs. 268.2 million worth of Government securities in the week ended 24 April, the first net buying in four weeks, but they have sold a net Rs. 6.6 billion worth of securities so far this year, the latest Central Bank data showed. 

The benchmark stock index ended 0.64% higher on Tuesday at 5,478.41, further moving away from its lowest close since 7 December 2012 hit on 23 April. On 23 April, it suffered its worst percentage fall since 14 February 2012. 

Turnover came in at Rs. 197.6 million ($1.12 million), lower than this year’s daily average of Rs. 591.9 million. Last year’s daily average was Rs. 834 million. Foreign investors bought a net Rs. 39.9 million worth of shares on Tuesday, but they have been net sellers of Rs. 4.4 billion worth of equities so far this year.