Stock market dips to 22-month low

Thursday, 18 February 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares fell for an eight straight session on Wednesday, marking their lowest close in about 22 months as rising domestic interest rates and global economic worries dampened investor sentiment.

Sri Lanka’s main stock index ended down 0.53% at 6,220.82, its lowest close since 29 April 2014. It has fallen 2.87% in the last eight sessions to Wednesday.

“Things are not looking bright. Investor confidence is very bad at the moment as they do not see a direction and the economy is getting weaker day by day,” said Dimantha Mathew, Research Manager at First Capital Equities Ltd.

The key index has fallen 9.8% this year through Wednesday, amid a rise in market interest rates.

Yields on 91-day T-bills rose 13 basis points at a weekly auction on Wednesday to a more than two-year high, signalling a further rise in market interest rates. The Central Bank rejected all bids at 182-day and the 364-day T-bill auctions which is also at more than two-year highs.

Turnover was Rs. 425.6 million ($3 million), less than this year’s daily average of Rs. 711 million.

Foreign investors were net buyers of Rs. 91.9 million worth of shares on Wednesday. But they have sold a net Rs. 201.7 million worth of shares so far this year.

Shares of Sri Lanka Telecom Plc fell 0.26%, while Distillers Sri Lanka Plc lost 2.32% and conglomerate John Keells Holdings Plc declined 0.44%.