Sri Lankan shares tumble after hawkish PM named

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

Sri Lanka’s stock market plunged Monday as the new president appointed a hawkish prime minister, raising concern that the country could resume its vicious ethnic war after a nearly four-year ceasefire. Sri Lanka’s stock market plunged Monday as the new president appointed a hawkish prime minister, raising concern that the country could resume its vicious ethnic war after a nearly four-year ceasefire. President Mahinda Rajapakse dropped plans to make former president Chandrika Kumaratunga’s brother Anura Bandaranaike the new premier and instead appointed nationalist Ratnasiri Wickremanayake to the post.

Wickremanayake, 73, replaces Rajapakse himself, who defeated former premier Ranil Wickremesinghe for the presidency last week in a campaign in which he vowed to review a peace process with Tamil Tiger rebels.

Wickremanayake is known as a hardliner and has previously advocated a military solution to the Tamil Tiger separatist insurgency which has claimed more than 60,000 lives since 1972.

The stock market took the appointment as a harbinger that a ceasefire brokered by Norway and in place since February 2002 could fall apart, traders said.

“The market picked up slightly at the openi