Stock market falls to near 3-week low

Reuters: Stocks fell for a fifth straight session on Wednesday, hitting a near three-week low, as investors cautiously bought risky assets amid political uncertainty ahead of the 8 January presidential poll.
The main stock index ended 0.33% lower at 7,199.73, its lowest close since 28 November. The fall erased Rs. 10 billion of market capitalisation from the Rs. 3.06 trillion ($ 23.34 billion)-worth Bourse.
Turnover improved, hitting its highest since 8 December, due to increased foreign and institutional investor trading. The day’s turnover stood at Rs. 1.31 billion ($ 9.99 million), according to stock exchange data, slightly less than this year’s daily average of Rs. 1.42 billion.
The Bourse saw a net foreign outflow of Rs. 267.5 million this session, but net inflow so far this year stood at Rs. 21.7 billion, exchange data showed.
“The index will move sideways until the next month’s election. There could be a pre-poll rally if investors see a clear winner in the election,” said Softlogic Stockbrokers chief operating officer Danushka Samarasignhe.
Market heavyweight John Keells Holdings fell 1.52% to Rs. 246.20, while top lender Commercial Bank of Ceylon edged down 0.3% to Rs.169.50.
Trading is expected to be sluggish due to political uncertainty ahead of the presidential polls next month, with the index seen falling through December-end.
Political analysts see a tight race between President Mahinda Rajapaksa and his former Health Minister Maithripala Sirisena, the consensus candidate of a united opposition. Both candidates are yet to announce their policies and manifestoes.
Eleven legislators from Rajapaksa’s United People’s Freedom Alliance, including Sirisena, defected after he announced snap elections last month. Two Opposition legislators have defected to Rajapaksa’s party.
Speculation over more defections at Parliament level also weighed on sentiment, analysts said.