COLOMBO: Sri Lankan main stock index fell 1.96 percent, or 147.18 points, to close at 7,366.68, its lowest for two weeks. The losses erased 62.7 billion rupees from the market value on Monday.
Investors also awaited economic policies of the new government.
“Political uncertainty is still prevailing. Margin calls may lead the market to fall tomorrow as well,” said Dimantha Mathew, manager of research at First Capital Equities (pvt) Ltd.
Analysts said investors are concerned about political stability after new President Maithripala Sirisena announced an interim cabinet last week he said would carry out reforms to fight corruption in the 100 days to a parliamentary election.
The main focus of the new government would be to introduce the democratic reforms it promised within the 100-day period, analysts said.
Shares in Commercial Bank of Ceylon Plc, the country’s biggest listed lender, fell 4.51 percent, while top conglomerate John Keells Holdings Plc lost 1.45 percent, dragging down the index.
Access Engineering Plc, the main contractor of an expressway project, fell 11.33 percent after the government said it would halt the Chinese-funded northern expressway project pending cost evaluation.
Analysts said the market was closely monitoring the government’s bureaucratic appointments to check if they were in line with its pledge of good governance and transparency.
Foreign investors, who bought a net 22.07 billion rupees worth of stocks last year, net bought 80.1 million rupees of shares on Monday.
The day’s turnover stood at 859.7 million rupees ($6.5 million), well below last year’s daily average of 1.42 billion rupees, stock exchange data showed.
