Poll, econ woes drag S.Lanka shares to near 2-mo low

COLOMBO Nov 5 (Reuters) - Sri Lanka's stock index .CSE fell 1.65 percent to its lowest close in nearly 2 months on Thursday, as economic woes and trade union protests ahead of national polls rattled investor confidence. The All-Share Price Index of the Colombo Stock Exchange fell 47.88 points to 2854.82, its fifth straight fall and lowest close since Sept. 15. It has lost 5 percent in the past five sessions.

"Investors are playing cautious amid low foreign inflows ahead of elections," Hussain Gani, associate director at Asia Securities, told Reuters.

The bourse has fallen 8.83 percent after the government said on Oct. 13 it will hold national polls by April.

Frequent protests and trade union actions have dampened investor confidence, which had been already on the decline on worries of political uncertainty ahead of national polls.

Investors are also wary of a likely loss of an EU trade concession.

The EU, which has given a trade concession that helped to boost Sri Lanka's top export, garments, is considering to withdraw the concession over a right abuse probe. See [ID:nLJ731429]

Worries of lower-than-expected corporate earnings and the arrest of one of Sri Lanka's main investors in a U.S. insider trading case in mid October, also have hampered market rise.

For more political risks, click [ID:nSP478539]

A lending rate cut in state banks last week is yet to help the bourse to pick up [ID:nCOL190249].

Market heavyweight John Keells Holdings JKH.CM, which posted 43 percent dip in its net profit in September quarter [ID:nCOL450119] on Thursday, fell 0.55 percent to 136.75 rupees.

Conglomerate Carson Cumberbatch CARS.CM fell 5.7 percent to 310 rupees a share.

Turnover was 940.8 million rupees ($8.2 million), more than double of last year's daily average of 464 million rupees.

With around 90 percent return so far this year, the CSE is still one of the best performing bourses in Asia.

The rupee LKR= closed flat at 114.80/85 a dollar with the central bank buying dollars at 114.80 for a twelfth straight week, dealers said.

Sri Lanka central bank on Thursday said it will allow foreign currency outflows up to $500,000 for foreign investments without its approval with effect from December. [ID:nCOL542636]

The interbank lending rate or call money rate CLIBOR edged down to 8.985 percent from Wednesday's 9.293 percent.

For secondary market rates, please see <0#LKBMK=>. ($1=114.80 Sri Lankan rupees) (Editing by Prem Udayabhanu)