Sri Lanka stocks closed weaker on Wednesday to a more than one-week low in dull trade as amid negative market sentiments as investors waited for directions from 2023 budget scheduled for Nov. 14, brokers said.
The market saw a turnover of 1.19 billion rupees, lower than this year’s average turnover of 3.1 billion rupees.
The main All Share Price Index (ASPI) closed weaker at 0.51 percent or 43.89 points to close at 8,561.96, its lowest close since Oct. 25.
Analysts said investors are concerned over the impact of local debt restructuring on risky assets as the market awaited for debt restructuring decision between the government and its creditors ahead of an IMF loan approval.
“Bourse fell back to red from previous day’s marginal gain as day selling by retailers took charge realizing profits from yesterday’s gain,” First Capital Market Research said in its daily note.
“However, investor activity remained dried up during today’s session as retailers chose to be on the sidelines waiting for direction on taxes from the budget 2023 scheduled to be presented on the 14th Nov 2022.”
The market in general is moving on a wait and see approach as it is expecting the interest rates to adjust downward, brokers said.
The market saw net foreign inflows of 33.4 million rupees. The total net foreign inflow so far for this year is 18.5 billion rupees.
The more liquid index S&P SL20 closed 0.34 percent or 8.8 points lower at 2,601.73.
The ASPI has lost 13.4 percent in October and 29.6 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.
Even though the companies have shown reasonable profits in the second and third quarters of the year investors are concerned over December-quarter earnings.
Analysts said, the disposable income of the general public and the investors reducing due to rapid inflation in the country and the proposed tax hikes is the main reason for the negative expectations over the December earnings.
Richard Pieris, leading the index fall, closed 2.9 percent lower at 26.3 rupees a share.
Sampath Bank fell 1.7 percent to 34.4 rupees a share, while Melstacorp closed 2.2 percent weaker at 44 rupees a share.