Stocks close at 7-week high; rupee strengthens

(Colombo) REUTERS: Sri Lankan shares closed at their highest level in seven weeks yesterday, led by a rally in banks and manufacturing stocks, while the rupee ended firmer. 
The benchmark stock index rose 0.28 percent to 5,880.40, the highest close since Sept. 3, 2019. This is the fourth straight session of positive close for the index, which has fallen 2.84 percent so far this year. 

Meanwhile, the rupee ended 0.06 percent firmer at 181.60/70 per dollar compared with Monday’s close of 181.70/80. The currency is up 0.55 percent so far this year. 
Foreign investors were net buyers of riskier assets for a third consecutive session as campaigning got underway for the country’s presidential election scheduled on Nov. 16. 
They purchased a net Rs.182.2 million (US$1 million) worth of shares, but they have been net sellers of Rs.3.59 billion of equities so far this year, according to index data. 
The two presidential frontrunners, former wartime defence chief Gotabaya Rajapaksa and Housing Minister Sajith Premadasa, are yet to announce their policy framework. Analysts had said that investors were waiting to see policies on tax, subsidies, and private businesses.

Equity market turnover was Rs.968.8 million, well above this year’s daily average of about Rs.666.4 million. Last year’s daily average was Rs.834.0 million. 

Meanwhile, foreign investors sold government securities on a net basis for the eighth time in nine weeks, selling a net Rs.724.9 million worth of government securities in the week ended Oct. 16. 

Total foreign outflows from government securities through Oct. 16 stood at Rs.55.6 billion, as per Central Bank data. 

Sri Lanka’s Central Bank left its key rates unchanged last week after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.