Stocks slip to 2-week closing low on foreign selling

Sri Lankan shares slipped for a third straight session yesterday and posted their lowest close in two weeks, weighed down by foreign selling amid concerns about political stability, stock brokers said.

The Colombo stock index ended 0.12 percent weaker at 6,551.78, its lowest close since February 14. The index rose 0.18 percent last week.

“Still political cloud remains and the market is waiting for a clear direction,” said Softlogic Stockbrokers Deputy CEO Hussain Gani. Foreign investors sold a net Rs.127.3 million worth of shares, but they have been net buyers of Rs.6.1 billion worth of equities so far this year.

Shares hit a more than three-week high last week after two key parties in the ruling coalition decided to remain in the ruling coalition, allaying fears of a government collapse. President Maithripala Sirisena reshuffled his cabinet on Sunday, appointing his prime minister as law and order minister, after the governing coalition suffered a series of defeats in local elections earlier this month.

However, the changes failed to boost the market which analysts said the cabinet reshuffle was not enough to address the election defeats. Turnover stood at Rs.1.05 billion yesterday, more than this year’s daily average of Rs.972.9 million.

Shares of Melstacrop Ltd fell 3 percent, Dialog Axiata PLC ended 1.5 percent weaker, Lanka ORIX Leasing Co PLC lost 2.9 percent, and Sri Lanka Telecom PLC fell 1.4 percent.

Sri Lanka’s stock, bond and foreign exchange markets will be closed today for a Buddhist religious holiday. Trading will resume tomorrow.