Sri Lanka stocks hit over 1-week low on profit taking; rupee slips

Reuters – Sri Lankan shares hit a more than one-week low on Thursday due to profit taking and continued foreign fund outflows from the island nation’s risky assets, while the rupee ended weaker on dollar demand from importers. ** The benchmark stock index ended 0.37% weaker at 5,372.37, its lowest closing level since June 11, after ending at a nearly seven-week high on Wednesday. The bourse rose 1.61% last week, but has dropped 11.24% so far this year. ** Sri Lanka’s economy picked up to 3.7% in first quarter 2019, government data showed on Wednesday. ** Sri Lanka plans to raise up to 480 billion rupees ($2.72 billion) in additional debt this year for financing the government’s repayment obligations via local and foreign markets, a document showed on Thursday. ** Moody’s said in a note on Wednesday that domestic and external obstacles pose challenges to Sri Lanka’s refinancing of government debt as recent terrorist attacks in the country could hurt revenue streams, further straining public finances and political issues could resurface. ** The central bank cut its key interest rates on May 31 to support a faltering economy as overall business and consumer confidence slumped following deadly bomb attacks in April. ** Sri Lanka is unlikely to hit its full-year economic growth target of 3-4% following the bombings, junior finance minister Eran Wickramaratne told Reuters last month. A Reuters poll has forecast growth to slump to its lowest in nearly two decades this year. ** Thursday’s stock market turnover was 136.01 million rupees ($769,940.56), well below this year’s daily average of about 546.8 million rupees. Last year’s daily average was 834 million rupees. ** Foreign investors sold a net 34.4 million rupees worth of shares on Thursday extending the year-to-date net foreign outflow to 5.9 billion rupees. ** The rupee ended at 176.70/80 per dollar, compared with Wednesday’s close of 176.65/80, market sources said. The rupee fell 0.14% last week, but is up 3.34% for the year. ** Analysts expect the rupee to weaken further as money flows out of stocks and government securities. ** The rupee dropped 16% in 2018 and was one of the worst-performing currencies in Asia. ** Foreign investors bought a net 311 million rupees worth of government securities in the week ended June 12, but the island nation’s net foreign outflow was at 21.6 billion rupees so far this year, central bank data showed.

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