COLOMBO, Dec 8 (Reuters) - Sri Lankan stocks edged up slightly on Monday, erasing early losses in sluggish trade as investors were cautious due to the political uncertainty ahead of the Jan. 8 presidential poll.
The main stock index rose 0.04 percent, or 2.55 points, to close at 7,241.47.
Turnover was 611 million rupees ($4.7 million) on Monday, exchange data showed, the lowest since July 28 and well below this year’s daily average of 1.44 billion rupees.
Foreign investors were net buyers of 164.9 million rupees worth of shares on Monday, extending purchases during the year to 21.92 billion rupees, the data showed.
“Investor interest is deteriorating, the market is volatile in low trade, as many are awaiting to see the direction as the election nears,” said Dimantha Mathew manager, research at First Capital Equities (pvt) Ltd.
Analysts said many investors were staying away ahead of the elections and the festive season.
Dialog Axiata Plc led the gains, ending up 3.85 percent, while Ceylon Tobacco Co Plc rose 0.95 percent.
Analysts expect volatility to continue and the overall index to be flat until the elections on Jan. 8, with speculation over more defections and likely violence ahead of the polls also weighing on sentiment.
Nine loyalists from Rajapaksa’s United People’s Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since Rajapaksa announced snap elections last week. Sirisena resigned to contest against Rajapaksa as the consensus candidate of a united opposition.
The general secretary of the main opposition United National Party and another opposition legislator joined Rajapaksa hours after he submitted his nomination on Monday.
Speculation over more defections also weighed on sentiment, analysts said.
$1 = 131.1000 Sri Lankan rupees Reporting by Ranga Sirilal; Editing by Prateek Chatterjee