Nov 21 (Reuters) - Sri Lankan stocks fell sharply on Friday to a more than two-week low on political concerns, a day after President Mahinda Rajapaksa declared he would seek an unprecedented third term, prompting defections from his ruling coalition.
After the market closed on Friday, Health Minister Mithripala Sirisena resigned from the government and said he would run as an opposition candidate against Rajapaksa in the snap election in January. Since the poll announcement six legislators have defected.
The main stock index fell 1.71 percent, or 128.71 points, to close at 7,401.62, its lowest close since Nov. 5.
"Lot of selling pressure was there with the political uncertainty," said Dimantha Mathew, manager-research at First Capital Equities (Pvt) Ltd.
Continued foreign buying, low interest rates and hopes of better corporate earnings pushed the bourse into an overbought zone by Nov. 18, before it started sliding back on the political developments.
Analysts said they expect the market to be volatile until the presidential election is over.
Friday's turnover was 2.14 billion rupees ($16.3 million), exchange data showed, well above this year's daily average of 1.44 billion rupees.
Foreign investors net bought shares worth 357.53 million rupees, extending foreign buying for this year to 18.94 billion rupees, exchange data showed.
Dialog Axiata Plc fell 5.1 percent, leading the overall fall, while biggest listed lender Commercial Bank of Ceylon Plc fell 1.6 percent.
($1 = 131.0000 Sri Lankan rupee)
(Reporting by Ranga Sirilal; Editing by Prateek Chatterjee)
After the market closed on Friday, Health Minister Mithripala Sirisena resigned from the government and said he would run as an opposition candidate against Rajapaksa in the snap election in January. Since the poll announcement six legislators have defected.
The main stock index fell 1.71 percent, or 128.71 points, to close at 7,401.62, its lowest close since Nov. 5.
"Lot of selling pressure was there with the political uncertainty," said Dimantha Mathew, manager-research at First Capital Equities (Pvt) Ltd.
Continued foreign buying, low interest rates and hopes of better corporate earnings pushed the bourse into an overbought zone by Nov. 18, before it started sliding back on the political developments.
Analysts said they expect the market to be volatile until the presidential election is over.
Friday's turnover was 2.14 billion rupees ($16.3 million), exchange data showed, well above this year's daily average of 1.44 billion rupees.
Foreign investors net bought shares worth 357.53 million rupees, extending foreign buying for this year to 18.94 billion rupees, exchange data showed.
Dialog Axiata Plc fell 5.1 percent, leading the overall fall, while biggest listed lender Commercial Bank of Ceylon Plc fell 1.6 percent.
($1 = 131.0000 Sri Lankan rupee)
(Reporting by Ranga Sirilal; Editing by Prateek Chatterjee)
