Stocks near 6-month closing low on foreign selling

(Colombo) REUTERS:  Sri Lankan shares ended lower for a sixth straight session yesterday to hit their lowest closing in nearly six months, as foreign investors sold banking shares such as Commercial Bank of Ceylon PLC.

The Colombo stock index ended 0.17 percent weaker at 6,337.88, its lowest close since December 22. The index dropped 0.7 percent last week, marking its third straight weekly fall. Foreign investors net sold Rs.213.2 million worth of equities yesterday, extending the year-to-date net foreign outflow to Rs.741.1 million worth of shares.

“The market is down with foreign selling,” said First Capital Holdings PLC Assistant Manager Research Atchuthan Srirangan.

“We saw some foreign selling in Commercial Bank, which brought the index down. The rupee depreciation also affected foreign investors.”

Shares in Distillers Company of Sri Lanka PLC closed 2.3 percent weaker, while Lanka ORIX leasing Company PLC ended down 3.3 percent, conglomerate John Keells Holdings PLC ended 0.2 percent lower and biggest listed lender Commercial Bank of Ceylon ended 0.2 percent down.

Most investors have adopted a wait-and-watch approach, hoping for some positive news on the economic front, analysts said.

Turnover stood at Rs.459.8 million, half of this year’s daily average of Rs.964.6 million.

A weaker rupee, political uncertainty and the recent fuel price hike weighed on sentiment in the past few weeks with local investors remaining on the sidelines as they gauged the impact of the floods last month, brokers said.

The Sri Lankan rupee slipped to a fresh all-time low of 159.80 per dollar on Monday, pulled down by a lack of support for the local currency from exporters.