Sri Lankan shares settled nearly 1% lower on Tuesday due to losses in industrial and consumer stocks after the country hiked fuel prices to combat its debilitating economic crisis.
The CSE All-Share index closed 0.96% lower at 8,393.47, snapping two straight sessions of gains.
The embattled nation delivered the long-flagged fuel price hike increase earlier in the day, taking another step in its bid to mend public finances.
Tourism-dependent Sri Lanka is in the throes of its worst economic crisis since independence in 1948, as a dire shortage of foreign exchange has stalled imports and left the country short of fuel and medicines, and struggling with rolling power cuts.
Analysts at U.S. investment bank JPMorgan have warned rising borrowing costs and the global fallout of the Russia-Ukraine war could see up to 10% of riskier, ‘junk’-rated emerging market countries suffer debt crises this year.
The equity market turnover was 2.32 billion Sri Lankan rupees ($6.54 million) on Tuesday.
Trading volume rose to 308 million shares from 153.3 million shares in the previous session.
Foreign investors were net buyers in the equity market, snapping up shares worth 49.2 million rupees, while domestic investors were net seller with 2.29 billion rupees worth of shares sold, according to exchange data.