Sri Lankan shares hit a one-week closing low on Monday, as investors sold shares of blue chip firms such as Ceylon Tobacco Company Plc and John Keells Holdings Plc amid concerns over rising market interest rates. The Colombo stock index fell 0.33 percent to 6,139.51, slipping for a third straight session to its lowest close since February 13.
"Blue-chips brought the market down. The profit-taking is still continuing and investors are more on a wait and see approach," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. "The buying interest is there, but at a lower level. So investors are waiting to buy at cheaper rates." Shares of Ceylon Tobacco Company Plc fell 1.83 percent, while conglomerate John Keells Holdings Plc dropped 1.22 percent.
Turnover stood at 728.9 million rupees ($4.83 million), more than this year's daily average of 625.5 million rupees. Foreign investors offloaded a net 34.88 million rupees worth of equities on Monday, extending the year-to-date net foreign outflow to 272.7 million rupees worth of shares. The market will remain slow for the next few days and many investors will wait for directions from a sovereign bond issue, Mathew said. The Sri Lankan cabinet last week approved a $1.5 billion sovereign bond issue to repay loans and manage interest payments. Yields on treasury bills are hovering at a more than four-year high.