POSTED AT 04:06 PM 10-08-2017
Sri Lankan shares fall to 3-1/2-month closing low; banks drag
Reuters - Sri Lankan shares fell for the ninth straight session on Wednesday, posting their lowest close in three-and-a-half months, with banks such as Hatton National Bank leading the fall.
The Colombo stock index fell 0.28 percent, or 18.10 points, to 6,506.03, its lowest close since April 25. It fell 1.5 percent last week in its third straight weekly drop.
"Turnover levels improved with the increased foreign participation, but the market came down with the continued selling pressure on selected counters," said Dimantha Mathew, head of research at First Capital Holdings.
"But the good thing is that foreigners are returning to the market."
Analysts said the market is coming down due to the negative sentiment after the earnings with the economic slowdown.
Foreign investors net bought shares worth 124.3 million rupees (about $811,358) on Wednesday, extending their year-to-date net inflow to 26.6 billion rupees.
Turnover stood at 747.5 million rupees, less than this year's daily average of around 884.6 million rupees.
Shares of Hatton National Bank fell 1.3 percent, Chevron Lubricant Lanka Plc ended 5 percent weaker and Ceylon Cold Stores Plc dropped 1.2 percent.
Analysts, however, expect equities to gain due to a fall in the yields of government bonds.
Sri Lanka's central bank held policy rates steady on Thursday, and said tightening measures taken in the past are helping cool inflation and credit growth.
Short-term treasury-bond yields fell between 10 basis points (bps) and 16 bps at a weekly auction on Wednesday, while the yields on a 59-month bond dropped by 99 bps and that on a 118-month bond fell by 78 bps at the last week auction.