Sri Lankan shares hit 1-yr closing low on rate hike concerns
COLOMBO, March 16 (Reuters) – Sri Lankan shares hit a one-year closing low on Thursday, falling for an eighth straight session, as concerns the central bank would raise rates next week weighed on sentiment after the International Monetary Fund urged it to tighten monetary policy.
The Colombo stock index closed 0.06 percent lower at 6,028.57, its lowest close since March 16, 2016.
The index has lost 1.45 percent over the last eight sessions since the IMF urged Sri Lanka’s central bank last week to be ready to tighten monetary policy if credit growth or inflation does not abate.
The central bank’s second monetary policy review of the year is due on March 24.
"It is a very dull day. Investors are on the sidelines because of the uncertainty and waiting to see the monetary policy decision next week," said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.
Turnover stood at 272.1 million rupees ($1.79 million), about a third of this year’s daily average of 667 million rupees.
The bourse slipped further into oversold territory on Thursday, with the 14-day relative strength index at 28.159 points versus Wednesday’s 28.701, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.
Shares of Sri Lanka Telecom Plc closed down 2.65 percent. Teejay Lanka Plc fell 1.67 percent.
Foreign investors net bought shares worth 103.2 million rupees in the 12th straight session of net-buying, raising the year-to-date net foreign inflow to 2.46 billion rupees into equities.