COLOMBO: Sri Lankan shares, led by market heavyweight John Keells Holdings, have weakened due to investors’ concerns over the rupee’s weakness, and worries that outflows from government securities could spread to equities.
The share index fell 0.73 percent to end at 6073.17, its lowest close since June 26.
Moody’s cut its credit rating outlook for Sri Lanka from positive to stable on Tuesday, adding to the bearish sentiment.
Turnover was at 738.1 million rupees ($ 5.65 million) yesterday, less than this year’s daily average turnover of about 1 billion rupees, according to provisional exchange data. John Keells lost 2.2 percent to 253.90 rupees.
The rupeeended steady at 130.55 per dollar, Thomson Reuters data showed, after the central bank said it can maintain exchange rate stability and there was little sign that foreign outflows from selling government securities would pose a significant risk.
Currency dealers, however, still see downward pressure on the rupee with foreign bond holders still selling their stakes in the secondary market after Moody’s move.
Currency dealers said the central bank also directed commercial banks not to buy dollars beyond 130.60. Officials from the central bank were not immediately available to comment.
Reproduced with permission from Arab News