May 28, 2018 / 12:35 PM / 10 months ago

Sri Lankan shares mark 2-wk closing low; trade dull

COLOMBO, May 28 (Reuters) - Sri Lankan shares marked their lowest close in two weeks on Monday with investors mostly keeping to the sidelines awaiting cues about the real impact of the floods that hit the island-nation over the past week.

A weaker rupee, political uncertainty and the recent fuel price hike also weighed on sentiment, brokers said.

The Colombo stock index ended 0.22 percent weaker at 6,453.41. It fell 0.4 percent last week.

Turnover was 397.4 million rupees ($2.52 million), less than a half this year’s daily average of 977.4 million rupees.

“It was a dull day with holiday-sandwiched Monday. Turnover was very low and we might see the real activities after Wednesday,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“The investors are waiting to see the full impact of the floods.”

Sri Lanka’s stock and rupee markets will remain closed on Tuesday for a religious holiday and normal trading will resume on Wednesday.

Heavy monsoon rains have killed 24 people, prompting authorities to warn against landslides and floods in low-lying areas after spill gates had to be opened across the Indian Ocean island, forcing over 70,000 out of their houses.

Foreign investors who were net buyers of 214.1 million rupees worth of equities so far this year were net sellers of 58.2 million rupees worth of shares on Monday.

Shares of Distillers Company of Sri Lanka Plc ended 1.8 percent down, while Sri Lanka Telecom Plc dropped 3.5 percent.

Stock brokers said investors were awaiting clarity on the political and economic front amid the recent fuel price hike, while the depreciation in the rupee also weighed on sentiment.

The rupee hit a fresh low of 158.50 per dollar on May 16 on importer demand for the U.S. currency.

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

On May 8, Sirisena urged his own coalition government and the opposition to end a power struggle to achieve ambitious goals including anti-corruption measures.

$1 = 157.8500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair

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