Bourse falls to 3-week closing low after spike in market rates

Thursday, 5 March 2015 00:16 -     - {{hitsCtrl.values.hits}}

Reuters: Stocks fell to a three-week closing low on Wednesday in thin trade a day after a sudden spike in market interest rates, while political uncertainty also weighed on investor sentiment. The Central Bank raised yields on Treasury bills between 86 basis points and 91 basis points at a weekly auction on Tuesday, a day after a lower repo penalty rate of 5% was scrapped, allowing market interest rates move upward.   The main stock index fell 0.45%, or 32.72 points, to 7,202.20, its lowest close since 9 February and marking the fourth straight session of losses. “The sudden spike in the interest rate was not expected, though the market was expecting an upward trend after the new Government came to power,” a stockbroker said on condition of anonymity. “The same sluggish trend will remain until we see political stability.” Elections to Sri Lanka’s 225-member Parliament are expected to be announced after 23 April and it is unclear whether the ruling coalition led by President Maithripala Sirisena would contest unitedly or go to the polls separately. The country’s top fixed-line phone operator, Sri Lanka Telecom, fell 1.26%, while market heavyweight John Keells Holdings Plc ended 0.1% lower.   Turnover was Rs. 638.9 million ($ 4.81 million), lower than this year’s daily average of Rs. 1.37 billion. Foreign investors were net buyers of Rs. 42.9 million worth of shares, extending the year-to-date foreign inflow to Rs. 1.84 billion. Both stock and currency markets will be closed on Thursday for a Buddhist religious holiday. Normal trading will resume on Friday.