Shares slump to 7-week low ahead of rate decision

REUTERS: Sri Lankan shares dropped to their lowest in more than seven weeks yesterday as financial stocks slid ahead of the Central Bank’s decision on interest rates.

The benchmark stock index ended down 2.1 percent at 7,193.09, its lowest since January 11. The index is off around 20 percent from its lifetime high hit on January 29, when it saw the best start to the year for any stock market in the world.

Sri Lanka Central Bank’s Monetary Board is due to release its decision on policy rates and its stance at 0200 GMT today.

The bank has held key rates steady in its previous four monetary policy reviews, after having aggressively cut rates to lift the island nation’s economy from the coronavirus pandemic.

Yesterday, financial services conglomerate LOLC Holdings tumbled 5.5 percent, stock exchange data showed, hitting its lowest since February 17.

Trading volume on the CSE All Share Index climbed to 141 million, from 66.7 million in the previous session.

Foreign investors were net buyers, purchasing shares worth Rs.420.6 million (US $ 2.16 million), according to exchange data.

Equity market turnover was Rs.2.43 billion, data showed.

The Sri Lankan rupee was last quoted at 194.5 against the U.S. dollar as of 1058 GMT, according to Refinitiv data.