S.Lanka bourse at 1-mo low on econ woes; union worries

By Shihar Aneez

COLOMBO, Nov 3 (Reuters) - Sri Lanka's stock index .CSE fell to its lowest in more than a month on Tuesday as state workers across sectors said they would take industrial action for higher pay, hurting investor sentiment.

Sunday's statement from the trade unions only added to worries of political uncertainty ahead of national polls, likely loss of an EU trade concession , 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.

The All-Share Price Index of the Colombo Stock Exchange fell 0.43 percent to 2964.19, its third straight fall and its lowest close since Sept. 30.

"Investors are just waiting for directions amid rapidly changing political environment," said Harsha Fernando, CEO at SC Securities. "But we don't expect the market to fall continuously as it had seen more volatility during the war time."

The government last month said it will hold national elections by April, sending shares sliding.

On Tuesday, the government presented an interim budget in parliament, instead of a full-year budget as it announced last month, citing pending elections early next year. [ID:nCOL434876]

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

State sector workers from several sectors on Sunday said they will take industrial action from Nov. 11, up until they meet their demand of post-war salary hikes ahead of national polls due by April 2010 [ID:nCOL119784]