Stocks edge down from over 1-week high

REUTERS: Sri Lanka’s stock index slipped yesterday from a more-than-one-week high hit in the previous session, with many foreign investors exiting risky assets on speculation over a U.S. rate hike while local investors were cautious ahead of a parliamentary election.

The main stock index ended down 0.49 percent at 7,044.60, slipping from its highest close since June 5 hit on Monday.

“Big-caps dragged the market down. Not many locals are on the buying side. It’s not that they don’t have money, but it’s that they are not willing to buy at this moment,” said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

“We expect the current stagnated situation to continue until the elections are announced.”

President Maithripala Sirisena’s government has said it would dissolve parliament once some crucial reforms, including an electoral bill, are passed, but is yet to fix a date for the election.

Yesterday’s turnover was Rs.860.9 million ($6.43 million), well below this year’s daily average of about Rs.1.1 billion.

The market saw net foreign outflows of Rs.258.9 million ($1.93 million), extending net foreign outflow for the past 15 sessions to Rs.2.54 billion. The bourse, however, has seen net inflows of Rs.3.40 billion into equities so far this year.

Analysts said foreign investors have been selling shares amid expectations the U.S. would hike key interest rates sooner than expected.

Shares in Nestle Lanka Plc fell 5.14 percent, while Ceylon Tobacco Company Plc fell 0.67 percent.

Shares in Conglomerate John Keells Holdings Plc, which saw a net foreign outflow of 1.4 million shares yesterday, ended 0.67 percent weaker.