Stocks close lower for second day; rupee ends flat

Reuters: Sri Lankan stocks slipped for a second straight session on Wednesday, amid weakness in hotels and manufacturing shares, while the rupee ended flat. 

The benchmark stock index ended 0.07% lower at 5,836.62. The index has dropped 3.56% so far this year. Meanwhile, the rupee ended steady at 181.85/95 per dollar compared with Tuesday’s close. The currency is up 0.41% so far this year.

Foreign investors were net sellers of riskier assets for the 11th straight session as campaigning got underway for the country’s presidential election.

They sold a net Rs. 95.6 million worth of shares, extending the year-to-date net foreign outflow to Rs. 4.13 billion of equities, according to index data.

One of the two presidential frontrunners, former wartime defence chief Gotabaya Rajapaksa, has won the backing of President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party (SLFP), in the election scheduled for 16 November.

Rajapaksa and the other strong candidate Sajith Premadasa, the housing minister who has strong backing among the rural poor, started their campaigns last week.

Equity market turnover was Rs. 540.2 million ($ 2.97 million), less than this year’s daily average of about Rs. 660.9 million. Last year’s daily average was Rs. 834.0 million. 

Foreign investors sold government securities on a net basis for the seventh time in eight weeks, selling a net Rs. 102.8 million worth of government securities in the week ended 9 October. 

Total foreign outflows from government securities through 9 October stood at Rs. 54.9 billion, as per Central Bank data.

Sri Lanka’s Central Bank left its key rates unchanged last week after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.