COLOMBO, Feb 1 (Reuters) - Sri Lankan shares slipped in thin trading on Wednesday and closed near a 10-month low hit last week on political worries and fears over further interest rate hikes, brokers said.
Investors turned cautious after the ruling coalition parties decided to contest local polls separately, while a rise in treasury bill yields last week also affected risk appetite, analysts said.
Yields on 91-day treasury bills rates rose 5 basis points at a weekly auction on Wednesday to a near four-year high, a month after the central bank governor signalled reduced intervention to defend the rupee.
Rising interest rates, which move in tandem with T-bill yields, have been a cause for concern, brokers said.
The Colombo stock index ended 0.04 percent down at 6,130.07, near its 10-month closing low hit last week. Turnover fell to 132.4 million rupees ($11 million), the lowest since Dec. 27.
“The market is cheap, but trading was very thin as investors are waiting for more stable promising horizon,” said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.
Foreign investors, who have been net sellers of 1.65 billion rupees worth of shares so far this year, net bought 6.5 million rupees worth of equities on Wednesday.
Shares of Commercial Bank of Ceylon Plc, the country’s biggest listed lender, fell 1.31 percent while Pan Asia Bank Corp Plc tumbled 8.38 percent. ($1 = 150.1000 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Shihar Aneez and Subhranshu Sahu)