November 12, 2015 / 11:40 AM / in 3 years

Sri Lanka shares hit over 1-week low; budget uncertainty lingers

COLOMBO, Nov 12 (Reuters) - Sri Lankan shares fell for a third straight session on Thursday to their lowest in more than a week despite foreign buying, while speculation and uncertainty over the upcoming budget dented investor sentiment.

Brokers said total trading volume was low because investors were on the sidelines awaiting policy direction from the annual budget scheduled for Nov. 20.

The main stock index ended down 0.18 percent, or 12.88 points, at 7,006.35, its lowest close since Nov. 4.

“Activity levels are drying down. Everybody is waiting for the budget as they are concerned over the possible taxes from the budget,” said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Finance Minister Ravi Karunanayake said market speculations on many uncertainties including further rupee weakening would be addressed once the clarity is given through the budget.

He also said the upcoming budget will be “capital oriented” and will aim for revenue that is higher than recurrent expenditure.

Foreign investors, who have been net sellers of 3.55 billion rupees worth of equities so far this year, bought a net 93.9 million rupees ($661,500) worth of shares on Thursday.

The day’s turnover was 579.8 million rupees, about half of this year’s daily average of 1.1 billion rupees.

Shares in Commercial Bank of Ceylon Plc fell 0.65 percent, while Dialog Axiata Plc fell 0.89 percent, dragging the overall index. ($1 = 141.9500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

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