Sri Lanka shares hit 1-1/2-week closing high; rupee strengthens

(Reuters) – Sri Lankan shares ended steady on Monday, hitting their highest close in more than a week, while the rupee edged up on dollar sales as month-end inward remittances surpassed greenback demand from importer, market sources said. ** The benchmark stock index ended up 0.08% at 5,376.67, its highest close since June 19. The index rose 0.16% last week and posted its first monthly gain for the year in June, rising 1.15%. However, the bourse is down 11.16% so far this year. ** Foreigners sold on a net basis for 15 sessions in 16, the bourse data showed. ** Monday’s stock market turnover was 252.6 million rupees ($1.43 million), well below this year’s daily average of about 542.7 million rupees. Last year’s daily average was 834 million rupees. ** Foreign investors sold a net 162.9 million rupees worth of shares on Monday, extending the year-to-date net foreign outflows to 6.5 billion rupees. ** The currency edged up at 176.25/35 per dollar, compared with Friday’s close of 176.40/50, market sources said. The rupee rose 0.17% last week and is up 3.6% so far this year. ** The island nation raised $2 billion via 5-year and 10-year sovereign bond sales last week, tapping global capital markets for the second time in three months. ** 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 2.26 billion rupees worth of government securities in the week ended June 26, but the island nation’s net foreign outflow was at 18.4 billion rupees so far this year, the central bank data showed. ** 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.

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