Sri Lankan stocks gained on higher turnover in the shares of DFCC Bank on Wednesday even as many investors stayed away for the Christmas holidays and political uncertainty ahead of the January 8 presidential polls dented market sentiment.

The index’s turnover got a boost after a high net-worth investor in DFCC Bank sold part of his stake in the lender, dealers said.

The bank accounted for 93.6 per cent of the index’s increased turnover of 3.79 billion rupees ($28.91 million) on Wednesday. Shares in DFCC were up 0.23 per cent at 0736 GMT.

The main stock index was up 0.33 per cent or 24.04 points at 7,262.09 at 0719 GMT.

“Apart from the DFCC deal, the sentiment is dull because of the political uncertainty and holiday mood. We see the index on the sidelines until the elections,’’ a stockbroker said.

President Mahinda Rajapaksa’s United People's Freedom Alliance lost its two-thirds majority in Parliament for the first time in more than four years after two ruling party legislators, including a cabinet minister, defected to join the Opposition camp on Monday.

Fifteen legislators, including two Buddhist party legislators and former health minister Mithripala Sirisena, who is challenging Rajapaksa’s bid for the third term, have defected after the president announced snap elections last month. Two Opposition legislators have left to join the ruling party.

Political analysts see a tight race between Rajapaksa and Sirisena, whose New Democratic Front has promised to eliminate rampant corruption and reduce the prices of essential goods and fuel by cutting taxes.

Rajapaksa had said on Tuesday that he would ensure good governance and media freedom if he bags a third term.

In the forex market, four-day rupee forwards were steady at 131.98/132.05 per dollar at 0739 GMT with the central bank capping the currency’s level at 132.00 through moral suasion, dealers said.

Three-day forwards, or spot-next, were traded at 131.99, dealers said.

The spot currency was not traded. ($1 = 131.1000 Sri Lankan rupees)

Related Topics