Sri Lanka shares fall; Inches international sales about 1 billion rupees
Sri Lanka shares fell for the fifth consecutive session and fell to a nine-month low on Thursday, as foreign investors continued to sell shares, unloading nearly one billion rupees of shares in the first four Sessions of the new year.
Foreign investors sold 181.7 billion rupees (1.22 million US dollars) of shares on Thursday, extending the net outflow in the first four trading sessions of the year to 996.6 billion rupees.
Concerns about a rupee weakening, rising interest rates and continued selling of the Heavyweight Index Holdings Plc John Keells also weighed on sentiment.
The Colombo stock index fell 0.09 percent to 6,147.52, its lowest close since April 4. The stock market fell by 9.7 percent in 2016, its second consecutive annual decline.
The index was trading in oversold territory on Tuesday, with a 14-day relative strength of less than 30, according to Thomson Reuters. A level between 30 and 70 indicates that the market is neutral.
John Keells conglomerate, which posted net sales of 2.34 million foreign shares, accounting for 62 percent of the day's 802.4 crore turnover, finished 0.14 percent lower.
Discussions of a high net worth foreign investor by leaving Keells triggered the sale of panic, brokers said.
"Foreign sales to Keells continue and reduced the market," said Dimantha Mathew, Research Director at First Capital Equities (Pvt) Ltd.
According to analysts, the volatility of interest rates and political uncertainties also cushion the sentiment of investors.
The Treasury auction yields increased by 6.5 basis points to a weekly auction on Wednesday, a day after the governor of the central bank said less intervention to defend the currency, as the market prepared for depreciation.
The shares of Hemas Holdings Plc fell 2.20 percent, while the largest listed bank Commercial Bank of Ceylon Plc lost 0.77 percent.