Shares hit 6-week closing low in lacklustre trade

Reuters: Shares closed at a six-week low on Friday amid concerns a rise in interest rates could turn investors away from stocks and into fixed income assets, brokers said.

Finance Minister Ravi Karunanayake, however, told Reuters after market hours that he believed interest rates should fall following the Central Bank decision to float the rupee currency on Friday.

The currency fell 3% to hit a record low of 139.00 against the dollar. 

The main stock index ended 0.42% lower, or 30.39 points weaker, at 7,215.11, its lowest close since 23 July. The index fell 1.8% on the week, its third straight weekly decline.

“Today’s equities wrapped up in red in lacklustre trade. Investors are waiting till proper economic reforms are put forward,” SC Securities Ltd. said in a note to investors.

“Volatility in global equities persisted and the emerging currencies weakened, as investors exited before US payrolls data on Friday.”

Analysts said the Central Bank’s move to float the rupee also put investors on a wait-and-see mode.

Foreign investors bought Rs. 190.4 million ($ 1.38 million) worth of shares on Friday, but they have sold a net Rs. 3.49 billion so far this year.

Turnover stood at Rs. 540.1 million, around half of this year’s daily average of Rs. 1.15 billion.

Shares in Ceylon Tobacco Company Plc fell 1.89%, dragging the index down.