Sri Lankan stocks hit a more than one-week closing low on Thursday, falling for a fourth straight session, as uncertainty over foreign investments and rising yields on short-term government securities hurt investor sentiment.
Block deals however boosted turnover to a three-week high.
The Colombo stock index ended down 0.33 percent at 6,164.90, its lowest close since January 10. The index hit a two-week high on Friday, after the European Commission proposed increased market access for Sri Lanka as a reform incentive. "The market is desperate for positive news," said Hussain Gani, deputy CEO at Softlogic Stockbrokers.
Rising market interest rates, which move in tandem with t-bill yields, are also cause for concern, other stockbrokers said. Yields on treasury bills rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency. Investors are also concerned over possible political uncertainty as the main coalition partners in government are contesting local polls separately, analysts said.
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