Sri Lankan shares rise as government aims to cut fiscal deficit

Sri Lankan shares rose broadly on Tuesday, following three straight sessions of losses, after the finance minister said the island nation aims to cut fiscal deficit by more than half.

The benchmark stock index ended 0.53% higher at 6,108.93.

Presenting the annual budget, Finance minister Mahinda Rajapaksa said the nation aims to cut its fiscal deficit to 4% over the medium-term, from 9% currently, adding that he had a medium-term inflation target of 5% and a medium-term growth target of 6%.

Sri Lanka's dollar bonds surged after the finance minister's comments, with the July 2021 issue reaching a seven-week high.

Aiding sentiment was gains in broader stock markets after US drugmaker Moderna said on Monday its experimental COVID-19 vaccine was 94.5% effective in preventing infection.

In Colombo, freight and logistics firm Expolanka Holdings PLC was the top boost to the benchmark stock index, rising 5.8%. Sri Lanka Telecom PLC jumped 4.4%.

On the other hand, Conglomerate Carson Cumberbatch PLC dropped 3.1%.

Trading volume on the CSE All Share Index rose to 89.7 million from 58.4 million in the previous session.

Foreign investors were net sellers in the equity market, offloading 138.1 million rupees ($746,083.20) worth of shares, according to exchange data.

Equity market turnover was 2.21 billion rupees, exchange data showed.

The Sri Lankan rupee was last quoted at 185.1 against the US dollar.