Sri Lanka markets volatile as Tamil Tigers strike southern port

October 18, 2006 (LBO) – The Sri Lankan rupee clawed back from Tuesday’s all-time low on profit taking by most banks, while stocks snapped a two-day slide, following a seaborne attack by Tamil Tiger rebels on the Galle port early Wednesday. Call rates transacted in the brokers’ market were 12.60 percent over a shortfall over around 5.6 billion rupees. The rupee closed at 107.00 against the U.S. dollar from Tuesday’s historical low of 107.10, after Central Bank threatened to get tough with dealers for excessively speculating on the currency.

The local currency started to slide after the Central Bank stepped back from intervening in the currency markets in an attempt to conserve the country’s reserves, which have fallen to three months of imports.

Elsewhere, Colombo’s All Share Price Index added 0.24 percent to close at 2,459.92 on retail buying interest in Sri Lanka Telecom, the island’s biggest fixedline operator.

The bourse, however fell nearly 1-percent during early trade, as the suicide attack on the harbour prompted retail selling across most sectors.

Wednesday’s turnover was 224.44 million rupees, mainly on account of a one-off deal in conglomerate Aitken Spence.

Top trades came from SLT, up 7-percnet to 23.00 rupees, Aitken Spence flat at 330.00 rupees and Distilleries up 1.3 percent to 60.00 rupees.