November 22, 2019 / 12:13 PM / 18 days ago

Sri Lankan shares, rupee end lower with new govt's policies in focus

COLOMBO, Nov 22 (Reuters) - Sri Lankan shares closed lower on Friday, slipping from a more than one-year high hit earlier in the week, while the rupee ended weaker as investors awaited the newly elected leader’s economic policies. ** Gotabaya Rajapaksa has appointed his brother Mahinda Rajapaksa, the current prime minister, as the interim government’s new finance minister. ** “Sri Lanka’s presidential election significantly increases policy uncertainty” and achieving the newly elected leader’s ambitious growth targets could entail stimulus measures that erode fiscal headroom, Fitch Ratings in a note on Thursday said. ** However, the central bank said the rating agency had depicted the complete opposite of the realised positive market response to the outcome of the election. ** The benchmark stock index ended down 0.31% at 6,119.27, moving away from its highest close since Aug. 9, 2018 hit on Tuesday. But the bourse has gained 1.6% for the week, and is up 1.11% for the year. ** “It was a bit volatile day. At one point the index went up by 50 points and then there was profit taking,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings. “The sentiment is now eroding and the market is waiting for the new policies of the government.”

** The rupee ended 0.22% weaker at 180.00/20 per dollar. It closed at 179.60/75 on Thursday and is up 1.44% so far this year. ** Foreign investors were net sellers of riskier assets for the 12th straight session on Friday. ** They sold a net 50.1 million rupees ($278,333) worth of shares on Friday, extending the net foreign outflow from the equities market to 9.24 billion rupees for the year, according to index data. ** Equity market turnover was 925.6 million rupees, well above this year’s daily average of about 709.5 million rupees. Last year’s daily average was 834 million rupees. ** Meanwhile, foreign investors were net buyers of government securities on a net basis for the fourth straight week, purchasing a net 2.2 billion rupees worth of government securities in the week ended Nov. 13. ** Total foreign outflows from government securities through Nov. 13 stood at 48 billion rupees, central bank data said. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 180.0000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sriraj Kalluvila)

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