Sri Lanka shares fall to near 3-week low on global selloff

COLOMBO, Aug 24 (Reuters) – Sri Lankan shares fell about 2 percent to a near three-week low on Monday, posting their biggest daily fall in nearly seven months, after foreign investors exited risky assets as fears of a China-led global economic slowdown churned world markets.

Alarm bells rang across world markets as a 9 percent dive in Chinese shares and a sharp drop in the dollar and major commodities panicked investors.

The main stock index fell 1.87 percent, or 140.08 points, to 7,331.09, its worst single-day percentage loss since Feb. 2 and hit its lowest since Aug. 4.

"Panic selling came in with the global market meltdown. There was heavy selling in stocks with foreign exposure," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"This trend will continue for the next couple of days and there could be some margin selling too as the index fell steeply in a very short period," Mathew said.

Foreign investors were net sellers of 163.6 million rupees ($1.2 million) worth of shares on Friday, extending the year to date net foreign outflow to 1.33 billion rupees.

The day’s turnover stood at 3.37 billion rupees, the highest since July 29 and aabout thrice of this year’s daily average of 1.16 billion rupees.

Shares in conglomerate John Keells Holdings Plc fell 2.96 percent, while the country’s biggest listed lender Commercial Bank of Ceylon Plc fell 2.46 percent, dragging the index down.
 

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