Wednesday, 25 March 2015 01:02
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Reuters: Shares fell for a second straight session on Tuesday and closed at their lowest in nearly seven months, led by banks amid political uncertainty while investors waited for cues on interest rates.
The main stock index ended 0.63%, or 44.37 points, weaker at 6,997.93, its lowest closing level since 28 August and below the key psychological support level of 7,000. It had lost 4.37% in the past 17 sessions.
“This is due to political uncertainty after the formation of the National Government,” a stockbroker said on condition of anonymity.
Analysts said the Government’s decision-making process would slow down after President Maithripala Sirisena formed a National Government incorporating the main Opposition party in a bid to push through reforms and preserve political stability.
They said the market was awaiting clarity on interest rates after yields on T-Bills fell between 31 and 44 basis points at a weekly auction on Wednesday, after having spiked by 112-124 basis points at the two previous weekly auctions.
The Central Bank said on Wednesday the low-interest rate environment was expected to continue benefiting from lower inflation while keeping policy rates steady.
Shares of the country’s biggest listed lender, Commercial Bank of Ceylon Plc, fell 2.31%, while Ceylon Theatres Plc dropped 7.14%. Conglomerate John Keells Holdings Plc fell 0.72%.
The day’s turnover was Rs. 394.1 million ($2.96 million), well below this year’s daily average of Rs. 1.21 billion.
Foreign investors were net sellers for the second straight session. They sold of Rs. 15.42 million worth of shares, but have been net buyers of Rs. 3.33 billion so far this year.
