COLOMBO, March 23 Sri Lankan shares fell for a
second straight session on Thursday to a more than one-year
closing low as expectations of an interest rate hike continued
to drag down the market ahead of the central bank's monetary
The Colombo stock index closed down 0.3 percent at
5,979.85, its lowest close since March 15, 2016. The index
breached a key psychological barrier of 6,000 in the previous
"There are no buyers as most of the local investors are on
the sidelines awaiting the outcome of the policy review," said
Dimantha Mathew, head of research, First Capital Equities (Pvt)
Sri Lanka's central bank could raise its key policy rates in
the coming months if it skips a chance to tighten at its second
monetary policy review of the year on Friday, a Reuters poll
showed, two weeks after the International Monetary Fund called
for further tightening.
Analysts said investors expected a rate hike.
Turnover stood at 616.4 million rupees ($4.1 million), less
than this year's daily average of 671 million rupees.
The index has lost 2.1 percent since March 7, when the IMF
called for monetary policy tightening if credit growth or
inflation do not abate.
The bourse dipped further into oversold territory on
Thursday, with the 14-day relative strength index at 24.614
points versus Wednesday's 26.758, Thomson Reuters data showed. A
level between 30 and 70 indicates the market is neutral.
Foreign investors net bought shares worth 194 million
rupees, raising the year-to-date net foreign inflow to 3.26
billion rupees in equities.
The treasury bill rates have risen between 33 to 77 basis
points since July 28, when the central bank last raised the key
Shares in Asian Hotel Properties Plc fell 2.9
percent, while Lanka ORIX Leasing Company Plc fell 0.8
percent and Sri Lanka Telecom Plc 0.9 percent.
($1 = 151.5000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by