Sri Lankan shares fell for a sixth straight session on Monday, posting their lowest close in four and a half months, in thin volume as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes. The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.
The benchmark index of the Colombo Stock Exchange ended down 0.8 percent, or 50.85 points, at 6,275.26, its lowest close since July 5. It has declined 2.27 percent over the past six sessions after the budget was presented on November 10. The index was in oversold territory, with the 14-day relative strength index at 18.405 versus Friday's 23.399, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.
"Confidence levels are very low and selling pressure is starting to increase with continued foreign selling," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd. Foreign investors sold a net 47.98 million rupees ($324,298.75) of shares on Monday, extending the year-to-date net foreign outflow of 1.16 billion rupee of shares. Turnover was 395.4 million rupees, well below this year's daily average of 700.8 million rupees. Shares of conglomerate John Keells Holdings Plc fell 1.16 percent, while Asiri Hospital Holdings Plc dropped 5.54 percent. Shares of Sampath Bank Plc fell 1.88 percent, while Sri Lanka Telecom Plc dropped 1.41 percent.