Shares fall on profit-taking

Sri Lankan shares snapped two straight sessions of gains on Friday on profit-booking in telecom stocks such as Dialog Axiata Plc, while investors assessed the impact of deadly floods that hit rubber and tea plantations last week on exchange rate and inflation.

Analysts said it is too early to evaluate the real impact of the floods and landslides caused by the worst torrential rains in 14 years, killing over 200 people and devastating crops.

The Colombo stock index ended 0.07 percent weaker at 6,689.07, edging down from its highest close since May 26 hit on Thursday. The bourse fell 0.13 percent during the week, recording its second straight weekly loss.

Turnover was 523.8 million rupees ($3.43 million), less than this year’s daily average of 898.7 million rupees.

Inflation could rise in the short term, especially due to crop damages and difficulties in distributing fresh food produce and staple food items, analysts said.

“Market wants to find a direction, one day it’s up another day it’s down as investors are awaiting for the direction,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

Foreign investors were net buyers of 66.5 million rupees worth of shares, extending the year-to-date net foreign inflow to 19.55 billion rupees.

Shares of Dialog Axiata Plc fell 2.5 percent while Carson Cumberbatch Plc dropped 5.7 percent and Lanka ORIX Leasing Company Plc ended 2.7 percent weaker. (Reuters)

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