Sri Lankan shares closed slightly weaker on Thursday, snapping two straight sessions of gains and hovering near a more than 10-month closing low hit earlier this week, as concerns over rising market interest rates weighed on sentiment. The Colombo stock index ended 0.04 percent lower at 6,094.15. The index hit its lowest close since March 2016 on Monday. "Interest rates are the real concern," said Prashan Fernando, CEO at Acuity Stockbrokers. "If the central bank raises the rates, it is going to hit the market."
The central bank on Tuesday kept its key rates steady for a sixth straight month, but flagged possible "corrective measures" in the months ahead in a sign further tightening might be on the cards to temper inflation pressures and safeguard a fragile rupee. Market turnover was 719.3 million rupees ($4.78 million) ($3.37 million) on Thursday, more than this year's daily average of 620.2 million rupees.
Foreign investors, who have been net sellers of 703.8 million rupees worth of shares so far this year, net bought 322.2 million rupees worth of equities.