Stock market falls to near 5-week low on foreign selling

Reuters: Shares fell more than 1% to hit a near five-week closing low on Tuesday as foreign investors sold off risky assets on fears of a China-led global economic slowdown and panic selling by retail investors for month-end settlements.

The main stock index ended down 1.36%, or 99.51 points, at 7,231.58, its lowest close since 23 July. The index has fallen 3.2% in the last two sessions, mainly due to a global selloff.

Turnover stood at 1.44 billion ($ 10.73 million), above this year’s daily average of Rs. 1.16 billion.

“With the huge fall yesterday there was some panic selling,” said Dimantha Mathew, a research manager at First Capital Equities Ltd. “The market will be slow, dull and in the red this week.”

Mathew expects the market to recover in September.

Foreign investors were net sellers of Rs. 199.7 million worth of shares on Tuesday, extending the year to date net foreign outflow to Rs. 1.53 billion.

Shares in conglomerate John Keells Holdings Plc fell 2.12%, while Nestle Lanka Plc fell 2.19%, dragging the index down.