May 7, 2019 / 12:01 PM / 13 days ago

Sri Lanka stocks end near 6-1/2-year low; rupee gains

COLOMBO, May 7 (Reuters) - Sri Lankan shares recouped early losses on Tuesday, but closed at their lowest levels in six-and-a-half years on lingering investor concerns following the Easter Sunday bombings. ** Investigators have dismantled a major part of the network linked to the Easter Sunday bombings, Prime Minister Ranil Wickremesinghe said on Tuesday, but warned the chance of further Islamist militant attacks could not be ruled out. ** The benchmark stock index ended 0.07 percent weaker on Tuesday at 5,382.54, its lowest close since Dec. 5, 2012. ** Turnover was 333.3 million rupees ($1.89 million), lower than this year’s daily average of 575.5 million rupees. Last year’s daily average was 834 million rupees. ** Foreign investors sold a net 57.1 million rupees worth of shares on Tuesday, extending the net foreign outflow to 4.5 billion rupees worth of equities so far this year. ** The rupee closed firmer on Tuesday on dollar selling by banks, snapping an eight-session losing streak and off a near six-week low hit on Monday. ** The rupee ended at 176.90/177.10 per dollar, compared with Monday’s close of 177.55/75, market sources said. ** Analysts say it could weaken further due to outflows from stocks and government securities. ** The island’s currency lost 1 percent last week, but is up 3.2 percent this year as exporters converted dollars after investor confidence stabilised following the repayment of a $1 billion sovereign bond in mid-January. ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. ** Foreign investors sold a net 3.3 billion rupees worth of government securities in the week ended April 30, extending the net foreign outflow to 10 billion rupees from the securities so far this year, the latest central bank data showed. ** The latest instability follows Sri Lanka’s plunge into political turmoil in October last year, when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. A court later ruled the move unconstitutional, and Wickremesinghe was reinstalled as premier. ** Investor sentiment took a big hit as a result of the 51-day political crisis, leading to credit rating downgrades and an outflow of foreign funds from government securities. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 176.6000 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

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