May 6 (Reuters) - Sri Lankan shares slipped on Wednesday from their two-month highs hit in the previous session as investors sold select illiquid shares and foreign investors exited from risky assets, while turnover hit a six-week high on local buying.
The main stock index fell 0.14 percent to close at 7,192.29, slipping from its highest closing level since March 4 hit on Tuesday. It gained 4.36 percent through Tuesday since the central bank cut key rates on April 15, while yields on t-bills have fallen 44-57 basis points since then.
"Market is down on large-cap illiquid shares, but we saw local participation is getting stronger. The confidence is slowly picking up with interest rates coming down," said a stockbroker asking not to be named.
Net foreign outflow from equities on Wednesday was 516.7 million rupees ($3.9 million), extending net outflows of 610.4 million rupees for the past three days. Foreign investors, however, have bought a net 3.2 billion rupees worth of shares so far this year.
Turnover stood at 1.68 billion rupees, the highest since March 25 and well above this year's daily average of around 1.07 billion rupees.
Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in wait-and-watch mode before the parliamentary elections.
Sri Lanka's parliament passed reforms last week to reduce some of the president's powers, although they were far fewer than President Maithripala Sirisena had promised.
Shares of Commercial Leasing and Finance Plc fell 6.67 percent, while Chevron Lubricants Lanka Plc fell 2.01 percent. Large-cap Ceylon Tobacco Co Plc fell 0.50 percent.
The main stock index fell 0.14 percent to close at 7,192.29, slipping from its highest closing level since March 4 hit on Tuesday. It gained 4.36 percent through Tuesday since the central bank cut key rates on April 15, while yields on t-bills have fallen 44-57 basis points since then.
"Market is down on large-cap illiquid shares, but we saw local participation is getting stronger. The confidence is slowly picking up with interest rates coming down," said a stockbroker asking not to be named.
Net foreign outflow from equities on Wednesday was 516.7 million rupees ($3.9 million), extending net outflows of 610.4 million rupees for the past three days. Foreign investors, however, have bought a net 3.2 billion rupees worth of shares so far this year.
Turnover stood at 1.68 billion rupees, the highest since March 25 and well above this year's daily average of around 1.07 billion rupees.
Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in wait-and-watch mode before the parliamentary elections.
Sri Lanka's parliament passed reforms last week to reduce some of the president's powers, although they were far fewer than President Maithripala Sirisena had promised.
Shares of Commercial Leasing and Finance Plc fell 6.67 percent, while Chevron Lubricants Lanka Plc fell 2.01 percent. Large-cap Ceylon Tobacco Co Plc fell 0.50 percent.
($1 = 133.3000 Sri Lankan rupees)
(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Prateek Chatterjee)
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