Shares close at 2-week high; rupee weakens

(Colombo) REUTERS: Sri Lankan shares ended firmer for a third straight session yesterday, hitting their highest close in two weeks, while the rupee edged down on importer dollar demand, market sources said. 

The benchmark stock index ended up 0.27 percent at 5,391.21, its highest close since June 19. The index rose 0.16 percent last week and posted its first monthly gain for the year in June. 

However, the bourse is down 10.92 percent so far this year. 

Foreigners sold on a net basis for 16 sessions in 17, the bourse data showed. 

Yesterday’s stock market turnover was Rs.507.3 million (US$2.88 million), less than this year’s daily average of about Rs.542.4 million. Last year’s daily average was Rs.834 million. 
Foreign investors sold a net Rs.167.6 million worth of shares yesterday, extending the year-to-date net foreign outflows to Rs.6.7 billion. 

Meanwhile, the currency edged down to 176.30/40 per dollar, compared with Monday’s close of 176.25/35, market sources said. The rupee rose 0.17 percent last week, and is up 3.57 percent so far this year. 

The island nation raised US$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 has been flowing out of stocks and government securities. 

The rupee dropped 16 percent in 2018 and was one of the worst-performing currencies in Asia. 

Foreign investors bought a net Rs.2.26 billion worth of government securities in the week ended June 26, but the island nation’s net foreign outflow was at Rs.18.4 billion so far this year, the Central Bank data showed.