Shares edge down on rate hike concerns ahead of review

Reuters: Shares edged down on Monday, hovering near a one-year closing low hit last week, as expectations of a rate hike continued to weigh on sentiment.

The Colombo stock index fell 0.1% to finish at 6,041.17, near its lowest close since 16 March 2016 hit on Thursday. The Bourse fell 0.6% last week, posting its fourth straight weekly decline.

The index has lost 1.2% since 7 March, when the International Monetary Fund called for monetary policy tightening if credit growth or inflation did not abate.

The Central Bank’s second monetary policy review of the year is due on 24 March.

“Retailers and institutional investors are on the sidelines; investors are awaiting the outcome of the monetary policy announcement,” said Dimantha Mathew, head of research, First Capital Equities Ltd.

Foreign investors net sold shares worth Rs. 3.74 million ($ 260,296), the first net outflow in 14 sessions. Foreign investors were net buyers of Rs. 2.49 billion worth of equities so far this year.

Turnover stood at Rs. 439.4 million, less than this year’s daily average of Rs. 672.2 million.

Access Engineering Plc lost 2% following a local media report that the Government stopped some development projects in which the company was involved.

Dialog Axiata Plc fell 0.9% and conglomerate John Keells Holdings Plc edged down 0.1%.