Sri Lankan stocks slipped on Tuesday as investors were cautious due to political uncertainty ahead of the January 8 presidential poll.

At 0825 GMT, the main stock index was down 0.21 per cent at 7,226.80.

“Market is volatile with the political uncertainty. With the recent crossovers, investors are waiting for direction,’’ said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

“Whoever comes into power the market will be positive and more positive. What we see is a small hiccup only.’’

Nineteen candidates, including President Mahinda Rajapaksa and former Health Minister Mithripala Sirisena, the consensus candidate of a united Opposition, submitted their nominations for the polls.

Nine loyalists from Rajapaksa’s United People's Freedom Alliance, including Sirisena, defected after he announced snap elections last week.

Rajapaksa said after submitting the nominations that the general secretary of the main Opposition United National party had joined him. Another Opposition legislator has pledged support to him.

Speculation over more defections also weighed on the sentiment, analysts said.

Turnover stood at SLR 639.8 million ($4.88 million), with 17.4 million shares changing hands.

Rupee forwards

Four-day rupee forwards traded steady as importer dollar demand offset greenback sales by exporters, dealers said.

The spot currency and three-day forwards, or spot-next, were not traded after the central bank capped the currency at predetermined levels to prevent volatility.

Central bank officials were not available for comment.

Dealers said four-day forwards traded weaker at 131.95/132.00 per dollar at 0830 GMT, compared with Monday's close of 131.92/97. ($1 = 131.2000 Sri Lankan rupees)