Sri Lankan shares closed slightly stronger on Tuesday, driven by telecom stocks and as foreign investors continued to buy the island nation's equities. However, investors were cautious as they waited for some cues about the real impacts of floods, brokers said.
Heavy monsoon rains have killed eight people, prompting authorities to warn against landslides and floods in low-lying areas after spill gates had to be opened across the Indian Ocean island. The Colombo stock index ended 0.1 percent firmer at 6,472.25, edging up from its lowest close since May 15 hit on Monday.
Foreign investors, who have been net sellers of shares worth 573.5 million rupees ($3.63 million) so far this year, net bought equities worth 73.3 million rupees on Tuesday. They net purchased shares worth 152 million rupees on Monday. "Some block deals pushed the turnover today. Other than that the market was very dull as investors were on the sidelines to asses the real impact of the floods," said Dimantha Mathew, head of research, First Capital Holdings.
Shares of Dialog Axiata Plc rose 2.8 percent, Distilleries Company of Sri Lanka Plc ended 0.9 percent higher and Sri Lanka Telecom Plc closed 1.6 percent firmer.
Turnover was 777.4 million rupees, less than this year's daily average of 991.1 million rupees. Stock brokers said investors also waited for more clarity on the political and economic front amid recent fuel price hike, while the depreciation in rupee also weighed on sentiment.
The rupee hit a fresh low of 158.50 per dollar on Wednesday on importer demand for the US currency. Analysts said concerns over political instability following President Maithripala Sirisena's decision to suspend the parliament last month after 16 legislators from his ruling coalition defected, dented market sentiment.
On May 8, Sirisena urged his own coalition government and the opposition to end a power struggle to achieve ambitious goals including anti-corruption measures.
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