December 9, 2015 / 11:41 AM / 2 years ago

Sri Lankan shares end lower for 4th straight session

COLOMBO, Dec 9 (Reuters) - Sri Lankan shares closed lower for a fourth straight session on Wednesday as investors turned cautious going into the holiday season and ahead of a likely decision by the U.S. Federal Reserve next week on raising interest rates, brokers said.

The main stock index ended down 0.11 percent at 6,841.55, its lowest close since March 31.

“Local participation is very low with the post-budget impact and with the closing in of holiday season. Investors are not in a buying mood ahead of the Fed rate decision,” said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Sri Lanka’s stock market has fallen for 10 out of the last 11 trading sessions and investor sentiment has been subdued after Prime Minister Ranil Wickremesinghe last week warned of lower economic growth next year due to the global slowdown.

The International Monetary Fund said on Monday Sri Lanka’s 2016 budget raises questions about its ambitious revenue and capital expenditure targets as the government is falling far short of steps needed to improve the tax system.

Sri Lanka doubled a nation-building tax and adjusted the corporate tax structure in its budget for 2016 on Nov. 20 to finance greater government spending in health and education, and accelerate the pace of economic expansion.

Foreign investors have sold a net 3.35 billion rupees ($23.40 million) worth of equities so far this year, but they bought a net 66.9 million rupees worth shares on Wednesday.

Turnover stood at 586.1 million rupees, well below this year’s daily average of 1.1 billion rupees.

Shares of Distilleries Company of Sri Lanka Plc fell 1.12 percent, while Dialog Axiata Plc slipped 0.93 percent lower. Chevron Lubricants Lanka Plc lost 1.60 percent.

Shares in index heavyweight John Keells Holdings Plc closed down 0.28 percent. ($1 = 143.1500 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

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