Sri Lanka shares closed down for a third straight session on Wednesday after an over 7% intra-day plunge pushed the Colombo Stock Exchange to halt trading twice, as power cuts rippled across the country grappling with its worst economic crisis.
Swathes of Sri Lanka faced prolonged power cuts on Wednesday as a deepening economic crisis roiled markets and buffeted businesses, with the government unable to pay for fuel shipments because of a foreign exchange shortage, an official said.
The island nation is currently seeing its worst economic crisis in decades and the International Monetary Fund has said that Sri Lanka needed a “comprehensive strategy” to make its debt sustainable.
The country’s foreign exchange reserves have fallen 70% in the past two years to about $2.31 billion, leaving it struggling to pay for essential imports, including food and fuel.
The CSE All-Share index closed down 3.66% at 9,294.89 points. For the week, the index lost 8.5%.
“The supply-side shocks are very bad and power cuts were increased to 10 hours a day. The overall sentiment is trickling down and economic reality is felt now,” said Udeeshan Jonas, chief strategist at equity research firm CAL Group, Colombo.
Heavyweights Expolanka Holdings Plc and Lanka Orix Leasing Company Plc were the top drags on the exchange, shedding 9.5% and 7%, respectively.
Foreign investors were net buyers in the equity market, purchasing shares worth nearly 419.2 million rupees, while domestic investors were net sellers, offloading 3.2 billion rupees worth of shares, exchange data showed.
The equity market turnover was 3.3 billion rupees.
Trading volume fell to 164.8 million shares from 265.2 million shares in the previous session.
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