Dec 11, 2008 (LBO) – Sri Lankan stocks lost closed 0.48 percent lower losing slim gains made a day earlier, while the rupee closed at 111.30/45 against the greenback in a day that saw no central bank intervention, dealers said.
The All Share Price Index lost 0.48 percent (7.53 points) to end at 1,561.38 points while the more liquid Milanka Index slid 0.79 percent (13.91 points) to close at 1,738.87.
Brokers said the dayâ€™s turnover of 49.1 million was fueled mainly by retail investor participation.
Renuka Holdings with 14.8 million rupees and Commercial Bank with 13.1 million were the dayâ€™s highest contributors to turnover.
Renuka Holdings was up five rupees to close at 45, Commercial Bank went up 1.25 rupees to close at 67.75, Sri Lanka Telecom closed one rupee down at 32, Dialog Telekom was flat 6.25 rupees and John Keells Holdings was up 25 cents to close at 59.
There was a net outflow of 3.1 million rupees with foreign buying at 13.6 million and foreign selling at 19.7 million rupees.
“With the limited intervention by the Central Bank to defend the rupee we’ll see foreigners selling their share portfolios now to buy back those same stocks at a lower price in the future,” one broker said.
However in the past the stock market have not been a major source of pressure on the balance of payments with lack of liquidity keeping large investors locked into their portfolio.
Unlike in inter bank foreign exchange or bond markets, where market participants can borrow and banks can seek central bank accommodation through lender of last resort facilities, domestic stock buyers have little access to credit or printed money.
The rupee hit a low of 111.30/60 and a high of 110.85/111.00 in intra-day trading.