May 23, 2018 / 11:55 AM / 3 months ago

Sri Lankan shares slip; turnover slumps to over 1-month low

COLOMBO, May 23 (Reuters) - Sri Lankan shares slipped to a more than one-week closing low on Wednesday, dragged by industrials such as market heavyweight John Keells Holdings .

Turnover slumped to a more than one-month low with investors staying on the sidelines as they waited for some cues about the real impacts of floods, while worries over a weaker rupee, political uncertainty and recent fuel price hike also weighed on sentiment.

The Colombo stock index ended 0.1 percent weaker at 6,465.48, its lowest close since May 15.

Turnover was 250 million rupees ($1.58 million), the lowest since April 18, and around a quarter of this year’s daily average of 983.1 million rupees.

“It was a dull market as local investors are still trying to digest the impact of fuel price hike,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“We expect the market to bounce back next week when investors see some directions.”

Heavy monsoon rains have killed ten people, prompting authorities to warn against landslides and floods in low-lying areas after spill gates had to be opened across the Indian Ocean island.

Foreign investors net sold 23.5 million rupees worth shares, extending the year-to-date foreign outflow to 597 million rupees.

Top conglomerate John Keells Holdings fell 0.63 percent, while large cap Nestle Lanka Plc declined 2.8 percent.

Stock brokers said investors were waiting for more clarity on the political and economic front amid recent fuel price hike, while the depreciation in rupee also weighed on sentiment.

The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the U.S. currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, dented market sentiment.

On May 8, Sirisena urged his own coalition government and the opposition to end a power struggle to achieve ambitious goals including anti-corruption measures. ($1 = 157.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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