Shares fall for 6th session on margin calls, political woes

REUTERS: Sri Lankan shares fell for a sixth straight session yesterday and closed at their lowest in more than eight months as mostly retail investors sold their stocks to settle margin trading, while political worries also weighed on sentiment.
The main stock index ended down 1.33 percent, or 91.09 points, at 6,782.43, its lowest close since July 24 and moving away from a key psychological support level of 6,800. It has lost 7.31 percent in the past 21 sessions.
“Investors have been selling blue chips and political uncertainty still weighs,” a stockbroker said on condition of anonymity.
Analysts expect the next support level at 6,500.
Shares in Commercial Bank of Ceylon PLC, the country’s biggest listed lender, fell 2.46 percent. Top mobile phone operator Dialog Axiata PLC fell 2.78 percent. The market heavyweight John Keells Holdings PLC fell 2.14 percent to a 32-month low of Rs.195.50.
The day’s turnover was Rs.457.3 million, less than half of this year’s daily average of Rs.1.19 billion.
Foreign investors were net sellers for the sixth straight session. They have sold a net Rs.42.7 million worth of shares yesterday, extending the net foreign selling in the past six sessions to Rs.373.7 million worth shares. But they have been net buyers of Rs.2.98 billion so far this year.
Analysts said concerns that the government’s decision-making process would slow down 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.