Reuters: Shares slipped in thin trading on Wednesday and closed near a 10-month low hit last week on political worries and fears over further interest rate hikes, brokers said.

Investors turned cautious after the ruling coalition parties decided to contest local polls separately, while a rise in Treasury bill yields last week also affected risk appetite, analysts said.

Yields on 91-day Treasury bills rates rose five basis points at a weekly auction on Wednesday to a near four-year high, a month after the Central Bank governor signalled reduced intervention to defend the rupee.

Rising interest rates, which move in tandem with T-bill yields, have been a cause for concern, brokers said.

The Colombo stock index ended 0.04% down at 6,130.07, near its 10-month closing low hit last week. Turnover fell to Rs. 132.4 million ($11 million), the lowest since 27 December.

“The market is cheap, but trading was very thin as investors are waiting for more stable promising horizon,” said Richard Pieris Securities Ltd. Chief Operating Officer Reshan Kurukulasuriya.

Foreign investors, who have been net sellers of Rs. 1.65 billion worth of shares so far this year, net bought Rs. 6.5 million worth of equities on Wednesday.

Shares of Commercial Bank of Ceylon Plc, the country’s biggest listed lender, fell 1.31% while Pan Asia Bank Corp Plc tumbled 8.38%.

Rupee up on exporter dollar sales, remittances

Reuters: The rupee ended slightly firmer on Wednesday due to dollar inflows from remittances and greenback sales by exporters after the dollar weakened overnight against major currencies globally, dealers said.

The dollar could recover only a little ground on Wednesday against key currencies, after recording its worst start to the year in three decades on concerns the United States was poised to ditch a two-decade old “strong dollar” policy.

Dealers said foreign outflows from Government securities and importer demand for the greenback continued to pressure the rupee.

The Central Bank revised the spot rupee reference rate to a record-low of 150.50 from 150.25 on Tuesday.

“The rupee ended firmer today due to some inward remittances following the salary season and some exporter conversions due to strengthening of euro and other currencies (against dollar),” a currency dealer said, requesting anonymity.

Rupee forwards were active, with two-week forwards trading steady at 151.00/10 per dollar, dealers said.

The rupee will also face depreciation pressure due to seasonal importer dollar demand, they said.

The rupee has been under pressure due to rising imports and net selling of government securities by foreign investors, while the Central Bank has said defending the currency was not sensible.

Foreign investors net sold Rs. 21.1 billion ($140.6 million) worth of Government securities in the three weeks to 25 January, according to latest Central Bank data.