Monday, March 14, 2016

Sri Lankan share index falls below key 6,000 support level

COLOMBO, March 14 (Reuters) - Sri Lankan share index fell on Monday, snapping a two-session gaining streak as it declined below a key support level of 6,000 points, stockbrokers said.

The benchmark share index was down 0.54 percent at 5,987.39 by 0627 GMT.

The index had gained 2.7 percent in the last two sessions through Friday due to a technical rebound.

Investors prefer fixed interest rate bearing assets over shares due to a rise in the yields on treasury bills, which are hovering at two-year highs, in tandem with the central bank's unexpected interest rates hike in mid-February, dealers said.

"Economy is also fragile. Still we are at a critical stage, so there is not a lot of buying," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"Only high risk takers are buying. Retailers, institutions and others are still out of the market and we expect the market to trade between 5,800 and 6,000 points in short term."

Turnover stood at 440.8 million rupees ($3 million).

The rupee traded steady in dull trade, currency dealers said.

One-week rupee forwards, which act as a proxy for the spot currency, traded flat at 145.20/25 per dollar at 0635 GMT compared with Friday's close.

The spot currency did not trade below 143.90, seen as the central bank's desired level.

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