Sri Lanka stocks tumble for second day as cabinet delayed
ECONOMYNEXT – Sri Lanka’s stocks tumbled for Tuesday for the second straight day with main Colombo stock exchange down one percent by mid-day brokers said as a newly elected legislators struggled to form a cabinet.
The main Colombo All Share Index was down 1.1 percent or 84 points by 12.15 pm in a broad based sell-off on the back of a 1.87 percent fall on Monday driven by foreign selling.
On Monday foreign investors were selling large cap stocks with global markets being routed, but some Asian markets were recovering.
Brokers said retail investors were also on the sell-side Tuesday with losers outpacing gainers around 7 to 1 by mid-day.
"There are some margin calls and the fall on Monday had probably spooked some retailers," a broker said.
Long term buyers were picking up value stocks amid the sell-off, he said.
Sri Lanka’s newly elected administration is struggling to name a cabinet in a ‘national government’ where the losing Sri Lanka Freedom Party of President Maithripala Sirisena is bargaining for cabinet positions with the winning United National Party leader Ranil Wickremesinghe.