Sri Lanka shares end lower on profit-taking; rupee weakens

(Reuters) – Sri Lankan shares closed weaker on Thursday as investors locked in profits after the recent rally in financial and industrial stocks, while the rupee edged down on importer dollar demand. ** The benchmark stock index ended down 0.54% at 5,917.15, from its highest close since July 30. The index posted gains of 0.82% last week. ** Dealers, however, said the market was expecting further gains after the main opposition party named hardline former defence chief Gotabaya Rajapaksa as presidential candidate, seeking to capitalise on public clamour for a decisive leader. ** Sri Lanka stock market ended firmer on Tuesday after Gotabaya launched his presidential bid. All financial markets were closed on Wednesday for a Buddhist religious holiday. ** Foreign investors exited from risky assets for the second day since Gotabaya was nominated, selling 36.1 million rupees worth of shares on Thursday after offloading 1.55 billion rupees worth shares in the previous session. * Gotabaya, 70, served under his older brother, ex-president Mahinda Rajapaksa, and is widely seen as the frontrunner in a presidential election that must be held before Dec 9. Gotabaya is immensely popular among Sri Lanka’s powerful Sinhala Buddhist majority, who credit him with ending the island nation’s 26-year-long civil war in 2009 and believe Colombo needs a seasoned hand after the April 21 bombings. ** The market had already gathered strength amid speculations of the wartime defence chief contesting for presidency, dealers said. ** So far this year, the index dropped about 2.2 %. ** Turnover was 1.08 billion rupees ($6.1 million), more than this year’s daily average of about 654 million rupees so far. Last year’s daily average came in at 834 million rupees. ** Shares of top lender Commercial bank of Ceylon lost 2.8%, while the market heavyweight John Keells Holdings ended down 1.5%. ** The rupee ended at 177.15/25 per dollar, compared with Tuesday’s close of 176.90/177.00. ** The rupee dipped 0.08% so far this week, but is up nearly 3% this year. ** The central bank left key interest rates unchanged on July 11 as expected, after cutting them in May to support the economy as tourism and investment plummeted in the wake of deadly suicide bombings in April. ** Foreign investors sold a net 729 million rupees worth of government securities in the week ended Aug. 7, extending the year-to-date net foreign outflow to 28 billion rupees, central bank data showed.

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