Sri Lankan stocks end lower on rising rates, economic worries

COLOMBO, Feb 15 (Reuters) – Sri Lankan shares edged down for the sixth straight session on Monday to close at a more-than-three-week low, as rising domestic interest rates forced investors to stay off risky assets while concerns over global worries also weighed.

Sri Lanka’s main stock index ended down 0.27 percent at 6,266.17, its lowest close since Jan. 20. It fell 1.9 percent last week.

Foreign investors were net sellers of 169.6 million rupees worth of shares on Monday, extending the year-to-date net foreign outflow to 345.7 million rupees worth of equities.

"Investors expect the market to come further down as the selling side remains high with no match for the buyers. Even buyers are waiting for prices to ease further," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"If this continues we may see a round of margin calls which will speed up the fall."

The key index has fallen 9.1 percent this year through Monday, amid a rise in market interest rates.

Yields on t-bills rose between 8 and 17 basis points at a weekly auction on Wednesday, with the 182-day and the 364-day t-bill yields climbing to more-than-two-year highs, signalling a further rise in market interest rates.

Some investors are shifting to fixed interest rate-bearing assets due to a gradual rise in interest rates, analysts said.

Turnover was 491.7 million rupees, less than this year’s daily average of 733.5 million rupees.

Shares of Nestle Lanka Plc fell 1.23 percent while Lanka ORIX Leasing Company Plc eased 0.26 percent and Dialog Axiata Plc lost 0.99 percent.





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