COLOMBO Sri Lankan shares fell for a fifth straight session and ended at a nine-month low on Thursday as foreign investors continued to sell shares, offloading close to one billion rupees worth of stocks in the first four sessions of the new year.
Foreign investors sold a net 181.7 million rupees ($1.22 million) worth of equities on Thursday, extending the net outflow in the first four trading sessions of the year to 996.6 million rupees.
Worries over a weakening rupee, rising interest rates and continued foreign selling in index heavyweight John Keells Holdings Plc also weighed on the sentiment.
The Colombo stock index ended 0.09 percent down at 6,147.52, its lowest close since April 4. The bourse fell 9.7 percent in 2016, its second straight annual decline.
The index has been trading in the oversold territory since Tuesday with 14-day relative strength index breaking below 30, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.
Conglomerate John Keells, which saw net foreign selling of 2.34 million shares that accounted for 62 percent of the day's turnover of 802.4 million rupees, ended 0.14 percent lower.
Talks of a high net worth foreign investor exiting from Keells has triggered panic selling, dealers said.
"Foreign selling in Keells is still continuing and that has brought the market down," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.
Analysts said interest rate volatility and policy uncertainties are also hurting investor sentiment.
Yields on treasury bill auctions rose 5-6 basis points at a weekly auction on Wednesday, a day after the central bank governor signalled less intervention to defend the currency as market has braced for a depreciation.
Shares in Hemas Holdings Plc dropped 2.20 percent while biggest listed lender Commercial Bank of Ceylon Plc lost 0.77 percent.
($1 = 149.4000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)