Stock market closes at over 7-month low on margin calls, political woes

Thursday, 26 March 2015 00:35 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares fell for a third straight session on Wednesday to a more than seven-month low as investors offloaded their holdings to settle margin trading while political uncertainty also weighed on sentiment. The main stock index ended 0.36%, or 24.90 points, weaker at 6,973.03, its lowest close since 15 August and further moving away from the key psychological support level of 7,000. It had lost 4.71% in the past 18 sessions. “The fall is mainly due to margin calls and some big caps also came down on political uncertainty,” said Reshan Wediwardana, a research analyst with First Capital Equities Ltd. Analysts said concerns that the Government’s decision-making process would slow down, also weighed on sentiment after President Maithripala Sirisena formed a national government incorporating the main opposition party in a bid to push through reforms and preserve political stability. The market also shrugged off a fall in t-bill yields, brokers said. Yields on t-bills fell between 17 and 19 basis points at a weekly auction on Wednesday, after they dropped 31 to 44 bps last week. The Central Bank said on 18 March that the low-interest rate environment was expected to continue benefiting from lower inflation while keeping policy rates steady. Shares of the country’s biggest listed lender, Commercial Bank of Ceylon Plc, fell 0.81%, while Ceylon Tobacco Company Plc dropped 2.32%. The day’s turnover was Rs. 2 billion ($ 15.05 million), its highest since 17 March and more than this year’s daily average of Rs. 1.21 billion. Foreign investors sold a net Rs. 5.59 million worth of shares, but they have been net buyers of Rs. 3.33 billion so far this year.

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