May, 17, 2018
Reuters - Sri Lankan shares rose for a second straight session on Wednesday and closed at a one-week high, with Ceylon Tobacco Co Plc leading the gains.
The Colombo stock index ended 0.42 percent firmer at 6,483.47, its highest close since May 9. It hit a five-week low on Monday.
“There was slow local buying on select shares. Still we do not see a bounce-back,” said Jaliya Wijeratne, CEO, First Capital Equities.
Turnover stood at 455.2 million rupees ($2.88 million), less than half of this year’s daily average of 1.01 billion rupees.
Foreign investors net sold equities worth 7.3 million rupees, extending the year-to-date net foreign outflow to 669.6 million rupees worth of shares.
Meanwhile, recent fuel price hikes weighed on investor sentiment, stockbrokers said.
State-run Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel on Thursday midnight in response to rises in global oil prices. Lanka IOC, a subsidiary of Indian Oil Corp, also increased fuel prices the same day.
Shares of Ceylon Tobacco rose 3.3 percent, Softlogic Holdings Plc closed 4.4 percent firmer and Lanka ORIX Leasing Co Plc climbed 1.8 percent.
The depreciation in rupee also weighed on the market, analysts said, as it is likely to hit profits of some listed firms that rely heavily on imports.
The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the U.S. currency.
Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, also hurt sentiment.
Last week, Sirisena urged his own coalition government and the opposition to end a power struggle in order to achieve ambitious goals including anti-corruption measures.