Sri Lankan shares extended declines to a second session on Wednesday, notching their worst day in 1-1/2 months as industrial stocks weakened and investors eyed an upcoming monetary policy decision.

The CSE All-Share index ended 1.97% lower at 8,907.35. The index pulled back on Tuesday, after its longest gaining streak since January 2021.

The index is still up 15.2% so far this month, but has lost 27.1% this year.

Sri Lanka’s central bank is likely to keep interest rates steady on Thursday on hopes that a recent downtrend in global commodity prices will be sustained and help steady record-high domestic inflation.

Sri Lankan shares dip after 12-day rally

Sri Lanka’s state of emergency imposed in the middle of last month will not be extended beyond this week, President Ranil Wickremesinghe’s media office said on Tuesday, as protests against the country’s economic devastation petered out.

Meanwhile, former president Gotabaya Rajapaksa will return to the island nation next week after fleeing in July amid mass protests, local broadcaster Newsfirst reported on Wednesday.

Conglomerates Expolanka Holdings and LOLC Holdings fell 3.1% and 4.6%, respectively, and weighed the most on the CSE All-Share index.

Trading volumes slipped to 129.1 million shares from 222.9 million shares in the previous session.

The equity market turnover was 3.77 billion Sri Lankan rupees ($10.62 million), according to exchange data.

Foreign investors were net buyers in the equity market, purchasing 119.8 million rupees worth of shares, while domestic investors were net sellers, offloading 3.73 billion rupees worth of shares, the data showed.