Sri Lanka stocks fall to 5-week low on president’s comments on inflation


ECONOMYNEXT – Sri Lankan shares closed lower on Thursday (06), at their lowest level in five weeks, as investor sentiment deteriorated following President Ranil Wickremesinghe’s comment on inflation, said the dealers.

Investors ignored the central bank’s decision to keep key rates stable.

The main All Share Price Index (ASPI) fell 1.47% or 136.78 points to close at 9,182.23, its lowest since August 31.

“ASPI returned to the red zone as selling pressure increased after the president’s comments on the nation’s inflation dragged down investor sentiment,” First Capital Market Research said in its daily note.

“…key rates were left on hold today at the monetary policy meeting, causing deeper wounds to investor sentiment. the imposition of a deposit rate ceiling in order to combat rising inflation.

The market also saw Lanka IOC and Expolanka taking profits.

The more liquid S&P SL20 index closed 2.33% or 67.24 points lower at 2,820.43.

The market recorded a turnover of 2.8 billion rupees, lower than this year’s average turnover of 3.2 billion rupees.

The stock market recorded a net inflow of 62.6 million foreign rupees on Thursday. The inflow so far this year is Rs 15.4 billion after Rs 16.8 billion in net overseas purchases in the last 38 consecutive sessions amid positive sentiment towards a agreement with the IMF.

The market saw its highest monthly net inflows of foreigners into the stock market last month in more than 10 years, as some foreigners converted their dividend payments into risky assets because they couldn’t get dollars to repatriate due to the currency crisis.

The island nation’s 4 trillion rupee stock market saw 14.7 billion rupees ($40.8 million) net foreign
influx in September, its highest since March 2012.

The index has lost 24.8% so far this year after being one of the best stock markets in the world with a return of 80% last year when large volumes of money were printed.

Lanka IOC closed down 4.5% at 229.5 rupees per share.

Expolanka closed 4.3% lower at 169.00 rupees and LOLC Holdings closed 3.7% lower
lower at 438.5 rupees per share. (Colombo/Oct06/2022)


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