Sri Lanka stocks plunge on political uncertainty

COLOMBO, Nov 24, 2014 (EconomyNext) – Sri Lankan stocks plunged almost three percent in the first hour of trading Monday in an across-the-board sell-off triggered by uncertainty after last week’s split in the ruling party ahead of a snap presidential poll in January.

The benchmark All Share Price Index slumped 222 points to 7,180.02 while the S&P SL20 index, which tracks the top 20 largest and most liquid stocks on the Colombo Stock Exchange, lost 123 points (three percent) to 4,003.85 on turnover of 436 million rupees.

The sell-off followed a similar plunge Friday which came with news of a split in the ruling coalition as Health Minister Maithripala Sirisena quite to announce he would challenge President Mahinda Rajapaksa as the common opposition candidate, a day after Rajapaksa announced a snap presidential poll in January.

Several other government politicians, including Cabinet ministers, said they will back Sirisena in the poll set for January 8 as did the main opposition United National Party and other smaller parties.

Brokers said investors were unnerved by the sudden split in the ruling party of Rajapaksa, who till then had seemed unassailable, and opposition parties closing ranks against him

They were also worried by the prospect of violence which usually accompanies polls in Sri Lanka.

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