Bourse falls to near 3-week low

Reuters: Shares ended near a three-week low on Friday led by large-caps and foreign selling in blue-chips while investors cautiously bought the island nation’s risky assets due to political uncertainty ahead of a Parliament poll.

The main stock index ended 0.49% weaker at 7,220.29, near its lowest close since 11 May.

Foreign investors sold a net Rs. 188.4 million ($ 1.41 million) worth of shares on Friday, extending foreign outflows to 1.49 billion in the last four sessions. But the Bourse has seen net inflows of Rs. 4.45 billion in equities so far this year.

Turnover was Rs. 1.26 billion, higher than this year’s daily average of about Rs. 1.14 billion.

Political uncertainty due to the Ranil Wickremesinghe-led Government not having a majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 4.6% since the rate cut.

Large-cap Ceylon Tobacco Company fell 3.3% while market heavyweight John Keells Holdings and top lender Commercial bank of Ceylon lost 2.5% and 0.8% respectively on foreign selling.

President Maithripala Sirisena’s Government has said it would dissolve Parliament once some crucial reform bills are passed. But it has not scheduled the date for the election.

Analysts say investors hope a new stable Government after the election coupled with strong economic measures would boost confidence.