Bourse ends at 30-month low on foreign selling, weak rupee

Reuters: Shares breached the 6,000-point psychological barrier and hit a 30-month closing low on Tuesday, weighed down by a weak rupee and heavy foreign selling in market heavyweight John Keells Holdings.

The Colombo stock index ended 0.95% weaker at 5,971.21, its lowest close since 15 March 2016. It lost 1.4% last week, its first weekly drop in four.

Earlier in the session, the rupee fell 0.5% and hit an all-time low of 166.00 per dollar, dented by higher dollar demand from importers amid reluctant greenback sales by exporters, market sources said.

The sliding rupee and political uncertainty weighed on sentiment, said Acuity Stockbrokers CEO Preshan Fernando.

“Foreign selling in Keells dragged the market,” he said.

Conglomerate John Keells Holdings Plc ended 2% down at Rs. 131.90 after hitting a 30-month low earlier in the trade.

Foreigners sold a net 2.1 million shares in Keells, data from the Bourse showed.

Turnover was Rs. 881.2 million ($ 5.32 million) on Tuesday, more than this year’s daily average of Rs. 797.5 million.

Foreign investors sold a net Rs. 200.7 million worth of shares extending the year-to-date net foreign outflow to Rs. 4.8 billion worth of equities.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices for a third time in four months this month due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Distilleries Co of Sri Lanka Plc ended 4% lower, Sampath Bank Plc closed 3.7% weaker and Nestle Lanka Plc ended down 2.8%.

Leading mobile phone operator Dialog Axiata Plc ended 2.4% lower and the biggest listed lender Commercial Bank of Ceylon Plc closed 2.5% weaker.