Sri Lankan shares end lower on rising rates

COLOMBO, Jan 16 (Reuters) – Sri Lankan stocks closed lower on Monday as investors sold financials after rising yields in short-term government securities hit sentiment, brokers said.

The Colombo Stock Index ended 0.26 percent weaker at 6,201.65, slipping from its highest close since December 30 hit on Friday.

Shares gained on Friday after the European Commission said that it had proposed increased market access or Generalised Scheme of Preferences Plus (GSP+) for Sri Lanka as a reform incentive.

"Positive sentiment on GSP Plus is shortlived. Rising rates are hitting the market," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Yields on treasury bill auctions rose 9-19 basis points at a weekly auction last week to a four-month high, after the Central Bank governor signalled reduced intervention to defend the rupee currency.

The day’s turnover stood at Rs911.9 million ($6.09 million).

Foreign investors net bought Rs78.7 million worth of equities on Monday, but they have net sold Rs1.62 billion worth of shares so far this year.

Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 1.41 percent, while Asiri Hospitals Plc fell 2.59 percent.
 

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