Shares end weaker; further fall expected

Wednesday, 16 March 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares edged down on Tuesday, falling for a second session amid fears of further declines due to worries over a higher budget deficit and economic growth, brokers said.

The benchmark share index closed 0.15% lower at 5,970.40.

Investors preferred fixed interest rate bearing assets over shares due to a rise in yields on Treasury bills, which are hovering at two-year highs, and on the Central Bank’s unexpected interest rate hike in mid-February, dealers said.

“The market should decline as the economy is running into a sharp fiscal problem. The recovery would take longer as there is no visible trigger compared to what we saw after the war,” said an analyst, asking not to be named.

The island nation’s economy grew at 4.8% last year, slowing from the previous year’s 4.9%, Government data showed on Tuesday, while it expanded 2.5% in the December quarter, down from a revised 5.6% in the previous quarter.

Foreign investors sold Rs. 16.7 million ($115,331) worth of shares on Tuesday, extending the net foreign outflow so far this year to Rs. 435.4 million worth of shares.

Turnover stood at Rs. 731.4 million, below this year’s daily average of Rs. 774.4 million.

Shares in Ceylinco Insurance Plc fell 0.79% while biggest listed lender Commercial Bank of Ceylon Plc eased 1.23%.

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