Bourse down, awaits Fonseka s next move

Tuesday, 22 May 2012 01:54 - - {{hitsCtrl.values.hits}}

Reuters: Stocks fell on Monday in thin volume as investors awaited direction on the political front from the release of former Army Chief Sarath Fonseka, who is President Mahinda Rajapaksa’s highest-profile rival.

Fonseka walked free from jail on Monday with a pardon from President Rajapaksa, who appears to have bowed to growing international demands.

The trading volume slumped to a five week low as investors stayed sidelined to see if there would be any significant changes politically after the release of Fonseka, who has been an ardent critic of Rajapaksa’s economic policies.

“But Fonseka cannot do anything immediately, though the hype has boosted the market last week,” said a stockbroker on condition of anonymity.

The main share index edged down 0.3 per cent, or 14.37 points, to 5,207.72, led by financials, with the second largest lender Hatton National Bank losing 1.8 per cent.

The market jumped more than two per cent on Wednesday on retail buying on the hope that the release of Fonseka would prompt more foreign inflows.

Analysts say the market was still concerned about economic woes on rising interest rates and rupee depreciation.

Turnover was Rs. 192 million ($ 1.48 million), well below this year’s daily average of Rs. 1.1 billion.

The index is one of the worst performers among Asian markets, with a 14.3 per cent loss so far this year.

The rupee ended down at 129.90/130.10 against the dollar from Friday’s close of 129.60/80, on importer demand for dollars, dealers said.