Stocks fall for 6th session, rupee snaps 2 days of gains

Friday, 10 May 2019 00:08 -     - {{hitsCtrl.values.hits}}


Reuters: Sri Lankan shares extended falls into a sixth session on Thursday and closed at their lowest levels in six-and-a-half years, due to shattered investor confidence after the Easter Sunday bombings. 

Investigators have dismantled a major part of the network linked to the Easter Sunday bombings, Prime Minister Ranil Wickremesinghe said on Tuesday, but warned the chance of further Islamist militant attacks could not be ruled out. 

The benchmark stock index ended 0.39% weaker on Thursday at 5,352.20, its lowest close since 5 December, 2012. 

Turnover was Rs. 228.8 million ($1.31 million), lower than this year’s daily average of Rs. 567 million. Last year’s daily average was Rs. 834 million. 

Foreign investors bought a net Rs. 30.8 million worth of shares on Thursday, but they have been net sellers of Rs. 4.4 billion worth of equities so far this year. 

The rupee closed weaker on Thursday, snapping two straight sessions of gains, on dollar demand from banks. 

The rupee weakened 0.34% to close at 175.60/90 per dollar, compared with Wednesday’s close of 175.00/50, market sources said. 

Analysts expect it to weaken further due to possible outflows from stocks and government securities. 

The island’s currency lost 1% last week, but is up 3.98% this year as exporters converted dollars after investor confidence stabilised following the repayment of a $1 billion sovereign bond in mid-January. 

The rupee dropped 16% in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

Foreign investors sold a net Rs. 3.3 billion worth of government securities in the week ended 30 April, extending the net foreign outflow to Rs. 10 billion from the securities so far this year, the latest Central Bank data showed.