June 25, 2019 / 12:31 PM / 3 months ago

Sri Lanka stocks fall; rupee ends steady as bond sale attracts dollars

COLOMBO, June 25 (Reuters) - Sri Lanka shares fell for the fourth straight session on Tuesday to hit a two-week low on foreign outflows, while rupee ended steady buoyed by dollar inflows into two new sovereign bonds launched a day ago, market sources said. ** The island nation raised $2 billion via 5-year and 10-year sovereign bond sales launched on Monday, its central bank said on Tuesday, tapping global capital markets for the second time in three months. ** The currency touched a high of 176.05 early in the day and ended steady at 176.45/55 per dollar, compared with Monday’s close as the exporter dollar sales offset the importer greenback demand, market sources said. The rupee is up 3.4% for the year. ** Analysts, however, still expect the rupee to weaken further as money flows out of stocks and government securities. ** The rupee dropped 16% in 2018 and was one of the worst-performing currencies in Asia. ** Foreign investors bought a net 879.6 million rupees worth of government securities in the week ended June 19, but the island nation’s net foreign outflow was at 20.7 billion rupees so far this year, central bank data showed. ** Meanwhile, Sri Lankan benchmark stock index fell for the fourth straight session on Tuesday and ended 0.22% weaker at 5,342.49, its lowest closing level since June 11. It fell 0.38% last week and is down 11.73% so far this year. ** Foreigners sold on a net basis for the 11th session out of the last 12, the bourse data showed. ** The central bank cut its key interest rates on May 31 to support a faltering economy as overall business and consumer confidence slumped following deadly bomb attacks in April.

** Sri Lanka is unlikely to hit its full-year economic growth target of 3-4% following the bombings, junior Finance Minister Eran Wickramaratne told Reuters last month. A Reuters poll has forecast growth to slump to its lowest in nearly two decades this year. ** Tuesday’s stock market turnover was 1.6 billion rupees ($9.07 million), nearly three time this year’s daily average of about 552.8 million rupees. Last year’s daily average was 834 million rupees. ** Foreign investors sold a net 174 million rupees worth of shares on Tuesday, extending the year-to-date net foreign outflow to 6.23 billion rupees. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 176.3500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Rashmi Aich)

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