Reuters: Sri Lankan shares fell to a more than four-month closing low in thin volume on Wednesday as investor sentiment was dented by the budget tax proposals last week, including revisions in corporate and withholding taxes, to boost revenue.
The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year on year, to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.
The benchmark index of the Colombo Stock Exchange ended 0.89 percent, or 57.13 points, weaker at 6,349.03, its lowest close since July 7.
It fell for a third straight session and was in the over sold territory, with the 14-day relative strength index at 26.347 versus Tuesday's 36.333, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.
"The budget proposals are still not clear and there are some concerns that some of the proposals could be reversed as in the last year," said a stockbroker asking not to be named.
Foreign investors offloaded shares worth a net 79.6 million rupees, their second straight session of selling. They have sold a net 1.09 billion rupee of shares so far this year.
Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.
Turnover was 514.1 million rupees, less than this year's daily average of 706.4 million rupees.
Shares of Commercial Bank of Ceylon Plc, the country's biggest listed lender, fell 4.66 percent, while Dialog Axiata Plc declined 5.41 percent and Sri Lanka Telecom Plc dropped 0.27 percent.
The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year on year, to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.
The benchmark index of the Colombo Stock Exchange ended 0.89 percent, or 57.13 points, weaker at 6,349.03, its lowest close since July 7.
It fell for a third straight session and was in the over sold territory, with the 14-day relative strength index at 26.347 versus Tuesday's 36.333, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.
"The budget proposals are still not clear and there are some concerns that some of the proposals could be reversed as in the last year," said a stockbroker asking not to be named.
Foreign investors offloaded shares worth a net 79.6 million rupees, their second straight session of selling. They have sold a net 1.09 billion rupee of shares so far this year.
Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.
Turnover was 514.1 million rupees, less than this year's daily average of 706.4 million rupees.
Shares of Commercial Bank of Ceylon Plc, the country's biggest listed lender, fell 4.66 percent, while Dialog Axiata Plc declined 5.41 percent and Sri Lanka Telecom Plc dropped 0.27 percent.
($1 = 147.7500 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)
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