Stock market falls

Tuesday, 26 January 2016 00:56 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan shares fell on Monday to snap a two-session winning streak ahead of the Central Bank’s monetary policy decision later in the day as investors worried over volatile global markets and rising returns on risk-free assets.

Six out of 11 analysts surveyed by Thomson Reuters expected the Central Bank of Sri Lanka to keep key policy rates steady, while the rest predicted a hike.

The main stock index ended 0.43%, or 27.41 points, lower at 6,354.83, after posting its highest close since 14 January hit on Friday.

“The trend is a declining one and not necessarily on the local, but the global events also,” said Softlogic Stockbrokers Research Head Danushka Samarasinghe,in Colombo.

The index has fallen 7.83% so far this year as foreign investors, unnerved by global concerns over China’s economy, have cut their exposure.

Foreign investors were net sellers of Rs. 10.5 million ($72,967.34) worth of equities on Monday, extending the year-to-date net foreign outflow to Rs. 2.28 billion.

The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80% at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.

Turnover was Rs. 374.1 million on Monday, well below this years daily average of Rs. 821.7 million.

Shares of Lanka ORIX Leasing Company Plc fell 1.91%, conglomerate John Keells Holdings Plc dropped 0.70% and Commercial Bank of Ceylon Plc, the country’s biggest listed lender, declined 0.77%.