Sri Lankan shares fell slightly on Monday, hovering near a more than two-month closing low hit early last week, with telecom stocks leading the decline. The Colombo Stock Index ended down 0.09 percent at 6,405.91, hovering near its lowest close since September 15 hit on Tuesday. It fell 0.03 percent last week, recording its fourth straight weekly drop, but has gained about 3 percent so far this year.
Worries over a delay in local council polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment, said analysts. Meanwhile, the Election Commission said on Monday that the council polls would be held before February 17.
Investors are concerned about political stability as coalition partners in President Maithripala Sirisena government had decided to contest separately in the council polls. Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented last month, with a final budget vote scheduled for December 9.
Shares in Hatton National Bank Plc fell 1 percent, Sri Lanka Telecom Plc dropped 2.4 percent and Overseas Realty Plc ended 3.4 percent weaker. Turnover was 716.1 million rupees ($4.67 million) on Monday, less than this year's daily average of 943.3 million rupees. Foreign investors were net buyers of equities worth 455.1 million rupees, extending the year-to-date net foreign inflow so far this year to 18.7 billion rupees worth of shares.