Colombo shares slide further on uneasy political developments

Colombo shares were down on Tuesday at close with dejected traders selling their stocks after a Sri Lankan court issued a restraining order on former President Mahinda Rajapaksa from acting as prime minister, along with his cabinet. 

The court is hearing a petition challenging his refusal to step down despite losing two no-confidence motions in Parliament last month. 

Traders sold midcap shares which saw the All Share Index fall by 0.22 per cent to close at 6,011 with S&P dropping by 0.69 per cent to 3,1791 on a Rs. 867 million turnover. There was trading in Dialog, John Keells Holdings, Access Engineering, Amana Bank and Janashakthi Insurance. 

The country has been gripped by a constitutional face-off between President Maithripala Sirisena and his sacked Prime Minister Ranil Wickremesinghe, who refuses to step down.
 
On the back of this impasse, Fitch Ratings on Tuesday said it had downgraded Sri Lanka's long-term foreign-currency issuer default rating to B from B+. The move reflected “heightened external refinancing risks, an uncertain policy outlook, and the risk of a slowdown in fiscal consolidation as a result of an ongoing political crisis”. (DEC)