Stock market down for 3rd consecutive day

Reuters: Shares fell for a third straight session on Thursday to a 22-month closing low, as investors shunned risky assets and an interest rate hike last week continued to dampen sentiment.

Local shares also tracked losses in Asian shares as crude oil prices seesawed and Chinese shares dived, rekindling anxiety about the impact of high market volatility on the global economy on the eve of a G20 meeting in Shanghai.

Sri Lanka’s benchmark share index closed 0.24%, or 15 points, weaker at 6,202.64, its lowest close since 29 April 2014. It has fallen over 10% this year through Thursday.

The index remained in the oversold territory for the third day, with the 14-day Relative Strength Index at 27.923, Thomson Reuters data showed. A level between 70 and 30 indicates the market is neutral.

On Wednesday, 182-day and 364-day t-bill yields rose 50-55 basis points at a weekly auction to more-than two-year highs, signalling a further rise in market interest rates.

“We expect the declining trend to continue with selling pressure due to high interest rates,” said Dimantha Mathew, head of research at First Capital Equities Ltd.

The central bank raised key policy interest rates by 50 basis points on Friday from a record low, to prevent demand-driven inflationary pressure.

Turnover was Rs. 559.3 million ($3.89 million) on Thursday, well below this year’s daily average of Rs. 713.8 million.

Foreign investors sold a net Rs. 192.5 million worth of shares, extending the net foreign outflow to Rs. 1.66 billion worth equities so far this year.

Shares in Sri Lanka Telecom Plc fell 6.09%, while Trans Asia Hotel Plc dropped 7.06%.