Stock market falls to near 2-wk closing low amid foreign outflows

Saturday, 21 May 2016 00:56 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan shares fell on Friday to a near two-week closing low, led by shares that could be easily affected by the floods, amid foreign selling and ahead of the Central Bank’s policy rate announcement due later in the day.

Lion Brewery Plc dropped 3.45 percent, a day after the company said it had halted production in its main factory in Colombo suburb due to the floods.

Investors awaited some cues on the interest rates ahead of the Central Bank’s May monetary policy decision.

The benchmark stock index fell 0.22 percent, or 14.86 points, to 6633.27, its lowest close since 10 May, and the index fell 1.12 percent during the week, the first weekly fall in seven weeks.

“It looks like there is a little more selling pressure and investors are bit concerned on rising interest rates,” said Head of Research, First Capital Equities (Pvt) Ltd, Dimantha Mathew.

Stockbrokers said manufacturing and banking sectors might get affected due to low employee turnout during the floods.

Concerns over a government move to increase the value added tax and impose new taxes, which could hit the bottom line of many companies, also hit the sentiment.

Yields on T-bills, which move in tandem with market interest rates, rose between 11 and 14 basis points at a weekly auction on Wednesday.

Hopes have faded for the survival of about 150 people trapped under the mud and rubble of two landslides in Sri Lanka, as heavy rain hampered rescue operations and the death toll from the disaster rose to 64 on Friday.

Turnover was 839.2 million rupees ($5.76 million), more than this year’s daily average of around 796.4 million rupees.

Foreign investors sold a net 101.2 million rupees worth shares on Friday, extending the year to date net foreign out flow to 4.3 billion rupees worth shares.

Shares in Ceylon Tobacco Company Plc dropped 1.79 percent dragging the overall index.