CSE at over 30-month closing low

Saturday, 22 September 2018 00:10 - - {{hitsCtrl.values.hits}}

Reuters: Shares dropped to their lowest close in more than 30 months on Friday as foreign investors sold banking stocks, while a weaker rupee dented investor sentiment as well.

The Colombo stock index ended 0.29% weaker at 5,904.90, its lowest close since 9 March 2016. It lost 2.1% this week, its second straight weekly drop.

“Today, the market came down on foreign selling in banking shares,” said broker First Capital Holdings Head of Research Dimantha Mathew, adding that the acceleration in the rupee’s depreciation was creating panic among investors.

The rupee hit a record low for an eighth straight session despite the Central Bank’s intervention. It fell to an all-time low of 169.00 per dollar, weighed down by importer demand for the scarce US currency. The rupee has weakened 4.5% so far this month after a 1.2% drop last month, and has declined 9.9% so far this year. Analysts said they expected a minor support for the stock market at 5,900 levels and a stronger support at 5,800 levels.

Turnover was Rs. 977.7 million ($ 5.80 million) on Friday, more than this year’s daily average of Rs. 796.3 million.

Foreign investors sold a net Rs. 359.9 million worth of shares, extending the year-to-date net foreign outflow to Rs. 5.6 billion worth of equities.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices in September for a third time in four months due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Sampath Bank PLC ended 2.5% weaker, Good Hope PLC fell 23%, Ceylon Tea Services PLC closed down 8%, and Commercial Bank of Ceylon PLC declined 1%.