Shares hit near 4-week closing low on foreign selling

Reuters: Shares declined for a second straight session on Tuesday and posted their lowest close in nearly four weeks, as foreign investors sold stocks such as conglomerate John Keells Holdings Plc, brokers said.

The Colombo stock index ended 0.41% lower at 6,117.63, its lowest close since 11 July, and has declined about 4% so far this year.

Turnover rose to the highest since 31 May, at Rs. 2.1 billion ($ 13.15 million), well above this year’s daily average of Rs. 849 million. “Market was dragged down by foreign selling of blue chips. A foreign fund is exiting as part of its selloff,” said Atchuthan Srirangan, assistant manager - research, First Capital Holdings Plc.

Foreign investors sold equities worth a net Rs. 983.4 million, extending the year-to-date net foreign outflow to Rs. 3.5 billion worth of equities.

Sri Lanka’s Central Bank left its key policy rates unchanged as expected on Friday and said the decision backed its goals for stabilising inflation and fostering sustainable economic growth.

Central Bank Governor Indrajit Coomaraswamy said the economy was unlikely to grow more than 4% in 2018, falling short of an earlier estimate of 5%.

Shares of John Keells, which accounted for 50.8% of the day’s turnover, ended 1.1% lower with foreign investors selling 7.5 million shares of the company.

Ceylon Tobacco Co Plc fell 1.7%, Hatton National Bank Plc declined 1.3% and Melstacorp LTD closed 2% weaker.