Friday, February 12, 2010

Political uncertainty drives Sri Lanka shares down

Sri Lankan shares fell for a third straight session on Thursday on political uncertainty amid clashes erupted in the capital following the arrest of losing opposition presidential candidate.

The All-Share Price Index of the Colombo Stock Exchange closed 49.50 points or 1.31 percent to 3,724.84 after hitting a record 3,806.78 in the previous session.

Thousands of Sri Lankans, protesting the arrest of losing presidential candidate Sarath Fonseka, clashed with government supporters on Wednesday, a day after parliamentary elections were called.

The opposition has said it will continuously agitate against the 'illegal' arrest of Fonseka, the former army commander who oversaw the victory in a 25-year war in 2009.

"Concerns are there with the current political uncertainty," said Prashan Fernando, executive director at Acuity Stockbrokers.

The bourse is still up 10 percent so far this year, following a 125 percent rally in 2009, one of the best in Asia.

Foreigners, who sold net 785.3 million rupees worth of shares in 2009, have sold a net 4.3 billion worth shares so far this.

Market heavyweight John Keells Holdings lost 2.1 percent to 163.75 rupees.

The day's turnover was 1.4 billion rupees ($12.3 million), over twice of 2009 daily average of 593.6 million rupees.

The Sri Lankan rupee closed flat at 114.66/68 per dollar on sluggish trade, dealers said.

The interbank lending rate or call money rate, fell to 9.086 percent from Wednesday's 9.148 percent.

© Reuters India

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