Reuters: Sri Lankan shares closed lower on Tuesday, led by large caps, as investors shunned risky assets in line with weaker global markets and after the country's central bank raised interest rates last week.
The central bank on Friday raised its key policy interest rates by 50 basis points from a record low, to prevent demand-driven inflationary pressure, signalling a rise in the local interest rates.
The recent recovery in riskier assets fizzled out on Tuesday, with a fall in stocks, oil and the value of China's yuan currency boosting investor demand for safer assets such as the Japanese yen, government bonds and gold.
The stock markets were closed on Monday for a Buddhist religious holiday.
The benchmark share index closed 0.35 percent weaker at 6,228.99, hovering near its lowest close since April 2014 which it hit on Thursday. It has fallen around 10 percent this year through Tuesday, amid a rise in market interest rates.
"Though there was an initial uptrend, invariably it came down," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. "It may not be a shock fall as the rate hike was expected. It'll be a gradual fall."
Yields on 91-day t-bills rose 13 basis points at a weekly auction last Wednesday to a more-than-two-year high, signalling a further rise in market interest rates.
Turnover was 605.2 million rupees ($4.20 million), less than this year's daily average of 728.1 million rupees.
Foreign investors sold a net 94.9 million rupees worth of shares on Tuesday, extending the net foreign outflow to 1.47 billion rupees worth equities so far this year.
Shares in Ceylon Tobacco Company Plc fell 2.35 percent, while Sri Lanka Telecom Plc fell 2.12 percent.
The central bank on Friday raised its key policy interest rates by 50 basis points from a record low, to prevent demand-driven inflationary pressure, signalling a rise in the local interest rates.
The recent recovery in riskier assets fizzled out on Tuesday, with a fall in stocks, oil and the value of China's yuan currency boosting investor demand for safer assets such as the Japanese yen, government bonds and gold.
The stock markets were closed on Monday for a Buddhist religious holiday.
The benchmark share index closed 0.35 percent weaker at 6,228.99, hovering near its lowest close since April 2014 which it hit on Thursday. It has fallen around 10 percent this year through Tuesday, amid a rise in market interest rates.
"Though there was an initial uptrend, invariably it came down," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. "It may not be a shock fall as the rate hike was expected. It'll be a gradual fall."
Yields on 91-day t-bills rose 13 basis points at a weekly auction last Wednesday to a more-than-two-year high, signalling a further rise in market interest rates.
Turnover was 605.2 million rupees ($4.20 million), less than this year's daily average of 728.1 million rupees.
Foreign investors sold a net 94.9 million rupees worth of shares on Tuesday, extending the net foreign outflow to 1.47 billion rupees worth equities so far this year.
Shares in Ceylon Tobacco Company Plc fell 2.35 percent, while Sri Lanka Telecom Plc fell 2.12 percent.
($1 = 144.1000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)
No comments:
Post a Comment