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Sri Lanka shares reach a closing low 10 months before the revision of bank interest rates

Sri Lanka shares fell Monday at a 10-month low closing, dragged down by the stocks of beverages and banks, while investors expected signals from the monetary policy review by the central bank on Tuesday.

The Colombo stock index fell 0.8 percent below 6,068.31, its lowest close since March 30, here in 2016.

Margin calls are expected in the coming days, said an analyst, the stock market fell below the 6140 psychological level and the index fell sharply at the end only slightly higher than the lower band of neutral territory.

The index, which had gone from the oversold region, has been trading in a neutral territory since January 10, with the relative strength index falling 14 days 30,474 on Monday, according to Thomson Reuters. A level between 30 and 70 indicates that the market is neutral.

Sri Lanka's shares, which have been declining since October, have been affected by political uncertainty stemming from the decision of the ruling coalition parties to challenge local elections separately and interest rates in the market with Returns 91 days Reaching the four-year highs last week.

The central bank of Sri Lanka could increase their key policy rates in the coming months if the opportunity to tighten next year, according to a Reuters poll, the week underlining the renewed pressure on the rupee following the increase in Fed past months.

Market turnover on Monday was 393.8 million rupees (2.62 million US dollars), well below the daily average of 625.5 million rupees this year.

"Market seen in negative before the announcement of the central rate rating of the bank, as many investors expect a rate hike," said Dimantha Mathew, research director at First Equities Capital (Pvt) Ltd.

"We can see some margin calls come in as the index fell below the psychological barrier."

Foreign investors have been net sellers of 1.29 crore shares so far this year, bought 241.3 crore shares on Monday.

Nestlé Lanka Plc shares fell 2.4 per cent, while Dialog Axiata Plc fell 2.8 per cent and Hatton National Bank Plc fell 0.9 per cent.

 
 

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