COLOMBO: Sri Lankan stocks ended weaker for the third straight session on Tuesday, easing to a three-month low as high interest rates weighed on sentiment with investors dumping risky assets to shift to high-yielding government securities.
The Colombo Stock Exchange’s main index ended 0.12 per cent or 6.26 points, weaker at 5,331.45, its lowest close since Sept.4. The index has now fallen to the over-sold region, Thomson Reuters data showed.
“Negative sentiment will continue until interest rates come down,” said a broker who declined to be identified.
The yield for 364-day T-bills gained for a seventh consecutive week at an auction on Wednesday. Analysts say investors have been shifting to fixed deposits from equities since the central bank kept key policy rates at three-year highs on Nov.9.
The day’s turnover was Rs505.5 million ($3.90 million), well below this year’s daily average of Rs898.5 million. Foreign investors bought a net 156.4 million rupees worth of shares, extending the net foreign inflow this year to 35.6 billion rupees.
The index fell to an over-sold territory on Tuesday with the 14-day relative strength index falling to 29.975, below the lower end of the neutral range of 30.