Sri Lanka stocks slide 1.1-pct, rupee held

Feb 26, 2013 (LBO) – Sri Lanka’s stocks slid 1.15 percent Tuesday amid a broad based sell-off ahead of an UN resolution over human rights later in the week and the rupee held steady with selling by a state bank, brokers and dealers said. Colombo’s benchmark All Share Index fell 66 points to 5,669.48 points and the S&P SL20 Index fell 21 points (0.65-pct) to 2,320,21 points.

Turnover was 713 million rupees.

Brokers said there was concern over a planned UN resolution on human rights on the country as well as a recent rise in fuel prices.

Analysts however say the fuel price hike is expected to improve state finances and reduce inflation and help prevent interest rates going up, which will be positive for the market.

Index heavy Ceylon Tobacco Company fell 29 rupees to 771 as some feared another tax hike on cigarettes while Distilleries Corporation also fell 2.90 to 181.00 rupees.

Sri Lanka Telecom fell 1.90 to close at 42.60 rupees.

Commercial Bank fell 10 cents to 107.50, John Keells Holdings fell 90 cents to 236 rupees and Hatton National Bank fell 20 cents to 147.50.

AIA Insurance gained 38.40 rupees to 333.40 after its parent made an offer to buy out minority shareholders at 346 rupees.

In forex markets the rupee was quoted around 127.48/50 levels with a state name on the selling side dealers said.

The rupee has come under pressure from excess liquidity and dollars sales which are not sterilized can mop up liquidity and tighten the monetary system, analysts say.

An outright auction of short-term Treasuries by the monetary authority was abandoned because there were no takers, dealers said. A term auction to withdraw liquidity was rejected.