Sri Lanka shares recover on bargain hunting; rupee gains

Reuters: Sri Lankan shares rose on Tuesday, recovering from a more than five-year closing low hit in the previous session, as investors picked up battered stocks, and 2019 budget proposals to increase spending and cut fiscal deficit boosted sentiment, analysts said. 

** The rupee closed firmer on inward remittances and dollar selling by exporters. 

** Sri Lankan Finance Minister Mangala Samaraweera on Tuesday presented the 2019 budget that raises spending while setting an ambitious goal to reduce the country’s large fiscal deficit. 

** The IMF has agreed to extend Sri Lanka’s $1.5 billion loan programme by one year and has reached staff level agreement to disburse the sixth tranche of the loan. 

** The Colombo Stock Exchange index closed 0.28 percent firmer at 5,770.57, edging up from its lowest close since Nov. 28, 2013 hit on Friday. Markets were closed on Monday for a holiday. 

** The benchmark stock index fell 1.43 percent last week. It declined 2.9 percent in February, its second straight monthly fall. 

** Turnover was 1.2 billion rupees ($6.71 million), more than last year’s daily average of 834 million rupees. 

** The rupee ended firmer at 179.00/25 per dollar, compared with Friday’s close of 179.70/85. 

** Foreign investors exited from government securities for the second straight week in the week ended Feb. 27, with net sales of 3.4 billion rupees, the central bank’s latest data showed. 

** The rupee has climbed 2 percent so far this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January. 

** Worries over heavy debt repayment after the 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country struggled to repay its foreign loans. 

** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

($1 = 178.8500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)