Markets

Sri Lankan shares end lower as financial weigh

  • The CSE All-Share Index ended down 1.39% at 7,728.61, its worst one-day percentage fall since May 10.
  • Trading volume on the exchange fell to 73.6 million from 87.1 million in the previous session.
Published July 1, 2021

Sri Lankan shares ended lower for a third straight session on Thursday, dragged down by losses in financial stocks amid warning from Fitch Ratings that the country's large banks were most exposed to sovereign risk.

Sri Lanka's largest banks are the most susceptible to heightened sovereign risk due to their higher exposure to foreign-currency denominated government securities, Fitch said in a note.

Domestic banks have significant direct exposure to the sovereign, largely via government-security holdings, as well as to the wider domestic economy and local financial markets, Fitch said.

The CSE All-Share Index ended down 1.39% at 7,728.61, its worst one-day percentage fall since May 10.

The index had recorded its third straight monthly gain, surging 5.9% in June.

Lender LOLC Development Finance fell 28%, snapping 11 straight sessions of gains and was the top drag on the index.

Sri Lanka reported 259,089 total confirmed coronavirus cases as of Thursday, and 3,077 deaths, according to the health ministry's data.

The island nation has fully vaccinated only 4.57% of its total population so far, Johns Hopkins data.

Trading volume on the exchange fell to 73.6 million from 87.1 million in the previous session.

Foreign investors were net sellers in the equity market, offloading shares worth 63.2 million rupees, exchange data showed.

The equity market's turnover was 1.4 billion rupees, according to exchange data.

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