Sri Lankan stocks ended weaker for a third straight session on Monday, led by market heavyweight John Keells Holdings as investors remained cautious ahead of the January 8 presidential poll next month. The main stock index ended 0.08 percent, or 6.11 points lower, at 7,230.26, its lowest close since December 9. Turnover was 340.4 million rupees ($2.6 million), according to stock exchange data, the lowest since May 26 and well below this year's daily average of 1.42 billion rupees.
Analysts and stockbrokers expect trading to be sluggish due to political uncertainty ahead of the next month presidential polls and the index to fall through December-end. "But the downside is limited because whoever wins in the election, the market will gain because of lower interest rates," said Danushka Samarasignhe, chief operating officer at Softlogic Stockbrokers. "The market will be lacklustre until the end of this year and we expect it to gain in the first week of January because there will be some political certainty by then." Foreign investors bought a net 60.9 million rupees worth of shares, extending their net buying so far this year to around 22 billion rupees, exchange data showed.
Shares in Keells fell 0.43 percent to 252 rupees. Nineteen candidates, including President Mahinda Rajapaksa and former health minister Mithripala Sirisena, the consensus candidate of a united opposition, submitted their nominations on Monday. So far 11 loyalists from Rajapaksa's United People's Freedom Alliance, including Sirisena, have defected after he announced snap elections last month, while two opposition legislators have joined the ruling party. Speculation over more defections also weighed on sentiment, analysts said.
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