Sri Lankan shares fell for the tenth straight session on Wednesday and closed at their lowest in nearly seven years, as sectarian violence dented investor sentiment, while the rupee edged higher after four straight sessions of losses.
Sri Lanka’s economic growth is expected to slump to its lowest in nearly two decades this year, a Reuters poll showed. Tourism, foreign investment, and overall business activity have all dropped after the bombings.
The benchmark stock index ended 0.45% weaker on Wednesday at 5,199.98, its lowest close since Aug. 30, 2012. Turnover was 388.6 million rupees ($2.21 million), less than this year’s daily average of around 555.9 million rupees. Last year’s daily average was 834 million rupees. Foreign investors sold a net 165.4 million rupees worth of shares on Wednesday, extending the year to date net foreign outflow to 4.4 billion rupees worth of equities so far this year.
The rupee closed slightly firmer on dollar selling by exporters and banks. The rupee gained 0.3% to close at 176.20/40 per dollar, compared with Tuesday’s close of 176.75/90, market sources said.
Analysts expect the currency to weaken as money flows out of stocks and government securities.