Sri Lanka shares fall for 3rd session; rupee gains

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COLOMBO, Dec 6 (Reuters) – Sri Lankan shares closed weaker for third straight session on Friday, weighed down by foreign sell-offs and profit-taking, while the rupee ended firmer.

** The Sri Lankan rupee rose 0.17% to 181.10/30 per dollar, compared to Thursday’s close of 181.40/50, Refinitiv data showed. It is up 0.8% so far this year.

** The benchmark stock index closed down 0.18% at 6,149.57, its lowest since Nov. 27. The bourse fell 1% last week, and is up 1.61% for the year.

** The index touched its highest level since June 25, 2018 on Monday, lifted by hopes of booming economic activity after the new government last week cut some key taxes.

** Analysts said the recent tax reduction has already been factored in and the market was waiting to see the impact of the new policy. They said investors sold shares that rose on hopes the new government will encourage an economic boom led by construction.

** The government on Nov. 27 reduced value-added tax to 8% from 15% starting Dec. 1, and abolished some other taxes as well in its attempt to boost economic growth that has fallen to a near two-decade low.

** Emerging Asia Economics, in a note on Monday, said the tax cut decision would provide a significant boost to the economy, but put increased strain on the country’s fragile public finances, with a possible loss of $2 billion in revenue.

** Foreign investors were sellers on Friday in the equity market for the 27th session out of last 30.

** They sold a net 86 million Sri Lankan rupees ($477,778) worth of shares on Friday, extending the year-to-date foreign outflow to 10.9 billion rupees, according to index data.

** Equity market turnover was 404.3 million Sri Lankan rupees, less than this year’s daily average of about 727 million. Last year’s daily average was 834 million rupees.

** Foreign investors were net sellers of government securities on a net basis for the first week in seven, selling a net 4.2 billion Sri Lankan rupees worth of government securities in the week ended Dec. 4.

** Total foreign outflows from government securities through Nov. 27 stood at 47.9 billion rupees, according to central bank data.

** For a report on global markets, click ** For a report on major currencies, click ($1 = 180.0000 Sri Lankan rupees) (Reporting by Shihar Aneez Editing by Chizu Nomiyama)

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