October 2, 2019 / 11:12 AM / 21 days ago

Sri Lankan stocks hit 10-week low on political woes; rupee firms

COLOMBO, Oct 2 (Reuters) - ** Sri Lanka’s stocks fell for the fourth straight session on Wednesday to a 10-week closing low, while the rupee closed higher.

** Stock brokers said investors were worried of political uncertainty after a Sri Lankan court set up a three-judge panel on Monday to hear a petition challenging the citizenship of presidential nominee Gotabaya Rajapaksa, which could disqualify the former defence chief from the Nov. 16 elections. ** The benchmark stock index ended 0.62% lower at 5,697.93. The bourse fell 0.38% last week. So far this year, the index has dropped 5.9%. ** The index rose in a couple of sessions last week, after the central bank said on Tuesday that the Monetary Board had ordered banks to reduce interest rates on all loans and advances by at least 200 basis points by Oct. 15. ** Equity market turnover was 500.2 million Sri Lankan rupees ($2.75 million), less than this year’s daily average of about 658.5 million rupees. Last year’s daily average was 834.0 million rupees. ** Foreign investors were net sellers of 53.6 million rupees worth of shares on Wednesday, extending the year-to-date net foreign outflow to 2.62 billion rupees of equities, according to index data.

** Meanwhile the rupee ended 0.16% firmer at 181.00/182.10 per dollar compared to Tuesday’s close of 182.20/40. The rupee fell 0.41% last week. However, the currency is up 0.38% this year. ** The International Monetary Fund cut its forecast for Sri Lanka’s 2019 economic growth to 2.7% from 3.5%, as the Easter Sunday attacks on hotels and churches earlier this year dented tourism and broader business activity. ** Foreign outflows from government securities, one of the major reasons behind the rupee’s recent weakness, may not abate till the end of parliament elections in 2020, some analysts said. ** The central bank does not release foreign trade numbers on a daily basis, but weekly data in the past four weeks has shown a steady outflow. ** Foreign investors sold government securities worth 439 million rupees in the week ended Sept. 25, extending the net foreign outflow so far this year to 55.3 billion rupees through Sept. 25, according to central bank data. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 181.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Shounak Dasgupta)

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