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Reuters: Shares fell for a third straight session on Thursday to their lowest in more than a week despite foreign buying, while speculation and uncertainty over the upcoming Budget dented investor sentiment.
Brokers said total trading volume was low because investors were on the sidelines awaiting policy direction from the annual Budget scheduled for 20 November.
The main stock index ended down 0.18%, or 12.88 points, at 7,006.35, its lowest close since 4 November.
“Activity levels are drying down. Everybody is waiting for the Budget as they are concerned over the possible taxes from the budget,” said Dimantha Mathew, Research Manager at First Capital Equities Ltd.
Finance Minister Ravi Karunanayake said market speculations on many uncertainties including further rupee weakening would be addressed once the clarity is given through the Budget.
He also said the upcoming Budget would be “capital oriented” and would aim for revenue that is higher than recurrent expenditure.
Foreign investors, who have been net sellers of Rs. 3.55 billion worth of equities so far this year, bought a net Rs. 93.9 million ($661,500) worth of shares on Thursday.
The day’s turnover was Rs. 579.8 million, about half of this year’s daily average of Rs. 1.1 billion.
Shares in Commercial Bank of Ceylon Plc fell 0.65%, while Dialog Axiata Plc fell 0.89%, dragging the overall index.
Reuters: The rupee edged down on Thursday, hovering near its record low hit earlier in the week, due to importer dollar demand.
The currency ended at 141.99/142.05 per dollar, near its all-time low of 142.00 and weaker from Wednesday’s close of 141.92/97. Dealers expect the currency to trade around current levels until they see some clarity from the 2016 Budget.
The rupee fell 0.35% in intraday trading on Monday to a record low of 142.00 per dollar.
“Importer demand surpassed exporter (dollar) sales,” said a currency dealer asking not to be named. “The exchange rate will be under pressure until the interest rates are raised.”
Another dealer said importers are booking forwards as they are not sure of the Budget while exporters are quietly selling in low volumes.
Investors are waiting for more clarity on economic policies from the 2016 Budget announcement, scheduled on 20 November.
Finance Minister Ravi Karunanayake said market speculation on further rupee weakening would be addressed once the clarity is given through the Budget.
“I don’t think it (rupee) is under pressure. It is just speculation,” Karunanayake told a Foreign Correspondents Association forum late on Wednesday.
The Finance Minister also said the upcoming Budget would be “capital oriented” and would aim for revenue that is higher than recurrent expenditure.
Commercial banks parked Rs. 106.65 billion ($751.32 million) of surplus liquidity on Thursday, using the Central Bank’s deposit facility at 6%, official data showed.
