Sri Lankan shares fell more than 2 percent on Tuesday, marking their lowest close in nearly two years as the government reintroduced capital gains tax and raised value added tax (VAT) as part of its efforts to qualify for an IMF loan. Sri Lanka will raise its VAT and reintroduce capital gains tax to break out of a debt trap, Prime Minister Ranil Wickremesinghe said on Tuesday, ahead of talks on a $1.5-billion loan it is seeking from the IMF.
Sri Lanka's benchmark share index ended down 2.02 percent at 5,934.72, the lowest close since March 24, 2014. It has fallen 4.2 percent in the last six straight sessions through Tuesday. The index remained in oversold territory for the ninth straight session, with the 14-day relative strength index at 13.645 on Tuesday, compared with Friday's 18.647, Thomson Reuters data showed.
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