• Wed. Jul 10th, 2024

Sri Lanka shares slump amid nationwide power cuts, worsening economic crisis

 (Reuters) – Sri Lankan shares plunged nearly 7% on Wednesday as fuel shortage-induced countrywide power outages spooked investors amid the nation’s worst economic crisis in years.

The CSE All-Share index (.CSE) was down 3.23% at 11,217.76 points at the closing bell, with IT, financial and industrial stocks falling the most. The index, which is down 8.5% for the year, had touched a 4-month low during the trading session.

Sri Lanka’s power regulator on Tuesday had approved a nearly five-hour countrywide power cut on Wednesday due to inadequate diesel supplies. The regulator warned of doubling the outage duration from Thursday if no diesel was received by Wednesday.

“The scheduled nationwide power cuts along with scarce fuel supplies have further spooked the markets today… With no incoming tourists, expenses piling up and crushing debt, the country has come to a near halt”, said Abhijit Kukreja, senior vice president for emerging markets equities at Auerbach Grayson.

Conglomerates Lanka Orix Leasing Company Plc (LOLC.CM) and Expolanka Holdings Plc (EXPO.CM) were the top drags to the index, dropping 8.9% each.

India’s foreign minister Subrahmanyam Jaishankar earlier in the day said that the country is willing to make investments in Sri Lanka to help ease the financial crisis. read more

Foreign investors were net buyers in the equity market, purchasing shares worth 169.7 million rupees ($840,099.01), however, domestic investors dumped shares worth 4.42 billion rupees and were net sellers, exchange data showed.

The equity market turnover was 4.52 billion rupees. The trading volume jumped to 188.5 million shares from 103.5 million shares in the previous session.

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