Sri Lanka's shares fell more than 1 percent on Friday, following the global trend, but became Asia's top performer as other regional markets nose-dived on looming fears of another recession with deepening debt crisis in the US and Europe. Globally stocks plummeted on Friday due to mounting concerns over the US economy heading into another recession while some European lenders facing a short-term funding crunch, highlighting the risk of a banking crisis.
The island nation's main share index fell 1.13 percent or 79.21 points to 6,951.64. But it became Asia's best performer with a return of 4.76 percent on the year as top markets like Indonesia and Thailand suffered heavy losses on Friday. "Selling pressure stemming from profit taking continued to drag the indices lower with heavy retail participation on speculative counters," JK Stockbrokers said in an investor note.
After the war, Sri Lanka's bourse turned Asia's best performer in 2009 and 2010, gaining 124 percent and 96 percent, respectively, but has touched negative territory this year. Brokers said large investors sold blue chips as speculation overwhelmed market fundamentals despite retail investors snapping up select shares after the Securities and Exchange Commission (SEC) on Tuesday relaxed the ban on margin trading by retail investors.
The bourse jumped over 3 percent on Tuesday after the regulator's move, which was in response to brokers' complains. The bourse witnessed a foreign fund outflow of 218.7 million Sri Lanka rupees ($2 million) on Friday, taking the net outflow to 2.8 billion rupees in 19 straight sessions.
Comments
Comments are closed for this article.