Reuters – Sri Lankan shares fell to a near one-year closing low on Tuesday as expectations of an interest rate hike weighed on sentiment, after the International Monetary Fund urged the Sri Lankan central bank to tighten monetary policy.
The Colombo stock index closed 0.4 percent lower at 6,046.79, its lowest close since March 30, 2016. The index shed 0.3 percent last week, posting its third straight weekly decline.
The IMF urged Sri Lanka’s central bank last week to be ready to tighten monetary policy if credit growth or inflation did not abate.
The central bank’s second monetary policy review of the year is due on March 24.
“Retail investors are looking at fixed deposits. Investors will wait until the rates come down or they will invest only if something that could boost the market happens,” said Prashan Fernando, who heads Acuity Stockbrokers.
Shares of Sri Lanka Telecom Plc closed down 2.9 percent. Biggest listed lender Commercial Bank of Ceylon Plc ended 1.1 percent weaker, while conglomerate John Keells Holding Plc fell 0.4 percent.
Foreign investors net bought shares worth 112.8 million Sri Lankan rupees ($745,046) in the tenth straight session of net-buying, raising the year-to-date net foreign inflow to 2.29 billion rupees in equities.
Turnover stood at 888.2 million rupees, higher than this year’s daily average turnover of 683.8 million rupees.
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