Sri Lanka stocks buffeted by inflation

June 12, 2008 (LBO) – Sri Lanka stocks dropped 0.60 percent Thursday with brokers forecasting the slide to continue owing to raging inflation, high interest rates and a slowdown in the economy. The All Share Price Index fell 0.60 percent (14.94 points) to end at 2,459.99 while the more liquid Milanka was down 0.90 percent (26.84 points) to end at 2,954.20.

Total turnover was 135.8 million rupees with 3.26 million shares traded.

“The market is not reflecting the fundamentals and it should fall further as a result of high inflation and the slow down in the economy,” a stockbroker said.

The gradual decline in the market can already be seen with trading drying up, he said.

On Thursday, indices were affected by John Keells Holdings losing 75 cents at 113.00 and Dialog Telecom dropping 25 cents at 12.75 rupees.

Aitken Spence closed up 30.00 at 550.00 rupees in deals that amounted to 12.9 million rupees in turnover.

The Distilleries group lost one rupee to close at 102.25 with 304,800 shares changing hands and adding 31.09 million to the total turnover.

Hayleys conglomerate also closed 1.50 rupees lower at 125.00, Thursday.