COLOMBO, Dec 17 (Reuters) - Sri Lankan stocks fell for a fifth straight session on Wednesday, hitting a near three-week low, as investors cautiously bought risky assets amid political uncertainty ahead of the Jan. 8 presidential poll.
The main stock index ended 0.33 percent lower at 7,199.73, its lowest close since Nov. 28. The fall erased 10 billion rupees of market capitalisation from the 3.06 trillion rupee ($23.34 billion)-worth bourse.
Turnover improved, hitting its highest since Dec. 8, due to increased foreign and institutional investor trading. The day’s turnover stood at 1.31 billion rupees ($9.99 million), according to stock exchange data, slightly less than this year’s daily average of 1.42 billion rupees.
The bourse saw a net foreign outflow of 267.5 million rupees this session, but net inflow so far this year stood at 21.7 billion rupees, exchange data showed.
“The index will move sideways until the next month’s election. There could be a pre-poll rally if investors see a clear winner in the election,” said Danushka Samarasignhe, chief operating officer at Softlogic Stockbrokers.
Market heavyweight John Keells Holdings fell 1.52 percent to 246.20 rupees, while top lender Commercial Bank of Ceylon edged down 0.3 percent to 169.50 rupees.
Trading is expected to be sluggish due to political uncertainty ahead of the presidential polls next month, with the index seen falling through December-end.
Political analysts see a tight race between President Mahinda Rajapaksa and his former Health Minister Mithripala Sirisena, the consensus candidate of a united opposition. Both candidates are yet to announce their policies and manifestoes.
Eleven legislators from Rajapaksa’s United People’s Freedom Alliance, including Sirisena, defected after he announced snap elections last month. Two opposition legislators have defected to Rajapaksa’s party.
Speculation over more defections at parliament level also weighed on sentiment, analysts said.
$1 = 131.1000 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Sunil Nair