Sri Lankan shares fall; end at lowest since mid-July

COLOMBO, Sept 17 (Reuters) – Sri Lankan shares ended at their lowest in more than two months on Thursday, slipping for a third straight session, led by diversified shares as cautious investors awaited direction amid a weakening rupee and an upward trend in interest rates.

The main stock index ended down 0.33 percent at 7,113.51, its lowest close since July 15.

Turnover stood at 658 million rupees ($4.69 million), well below this year’s daily average of 1.12 billion rupees. The turnover has been about half of this year’s daily average since Aug. 31, stock exchange data showed.

"Policy directive is not clear and the rupee depreciation is also affecting the manufacturing sector," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

Analysts said investors were waiting to see how the government would bridge the budget deficit and where the revenue would come from, in its November budget.

A weak rupee curbed investor risk appetite and rising market interest rates also hit sentiment, with t-bill yields at their highest level in more than five months at the last auction.

The rupee ended a tad firmer on Thursday, after hitting a record low for a fourth session in a row on Wednesday.

Foreign investors were net buyers of 29.6 million rupees worth of shares on Thursday, but they have been net sellers of 2.94 billion rupees worth of equities so far this year.

Shares in conglomerate John Keells Holdings Plc fell 0.97 percent, and brokers attributed the fall to new shares coming in with the expiration of warrants.

Shares in Lanka ORIX Leasing Company Plc slipped 1.80 percent.  (Colombo/September 17 2015)
 

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