S.Lanka stocks extend losses on econ woes, protests

By Shihar Aneez

COLOMBO, Nov 4 (Reuters) - Sri Lanka's stock index .CSE fell 2.07 percent to a fresh over one-month low on Wednesday led by blue chips as cautious investors sold them due to declining investor confidence on economic worries and union protests.

A clash between Sri Lankan police and unemployed graduate union protesters in the commercial heart of Colombo area on Wednesday [ID:nCOL539348] dampened investor sentiment, after state unions threatened to start a protest from Nov. 11

The union protests have 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 61.49 points to 2902.70, its fourth straight fall and lowest close since Sept. 28.

"Political worries ahead of elections have hit investor confidence," Prashan Fernando, executive director at Acuity Stockbrokers, told Reuters.

The bourse has have fallen 7.3 percent so far, since the government on Oct. 13 said it will hold national elections by April.

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]

For more political risks, click [ID:nSP539379]