May 18, 2018 / 11:53 AM / 3 months ago

Sri Lankan shares hit 2-week closing high in thin trade

COLOMBO, May 18 (Reuters) - Sri Lankan shares rose to a two-week closing high on Friday, led by diversified and banking stocks, but trading was thin as investors waited for more clarity on the political and economic front.

The Colombo stock index ended 0.29 percent firmer at 6,492.06, its highest close since May 4. It rose 0.2 percent this week, in its first weekly gain in four.

“It was a low activity market and blue chips moved the market up,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“There are queries from investors, but nobody is taking the initiation to invest yet.”

Turnover was 433.3 million rupees ($2.75 million), less than half of this year’s daily average of 998.6 million rupees.

Foreign investors net sold equities worth 51.4 million rupees, extending the year-to-date net foreign outflow to 798.8 million rupees worth of shares.

Meanwhile, the recent fuel price hike weighed on investor sentiment, stockbrokers said.

State-run Ceylon Petroleum Corp (CPC) raised retail prices for gasoline and diesel last week in response to increases in global oil prices. Lanka IOC, a subsidiary of Indian Oil Corp, also increased fuel prices.

Shares of conglomerate John Keells Holding Plc rose 2.7 percent, while Lanka ORIX Leasing Company Plc ended up 0.1 percent. Lanka IOC ended 3.3 percent firmer.

The depreciation in rupee also weighed on the market, analysts said, as it is likely to hit profits of some listed firms that rely heavily on imports.

The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the U.S. currency.

Analysts said concerns over political instability following President Maithripala Sirisena’s decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, dented market sentiment.

Last week, Sirisena urged his own coalition government and the opposition to end a power struggle to achieve ambitious goals including anti-corruption measures. ($1 = 157.8000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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