Sri Lankan stocks fell to a one-week low on Wednesday as selling pressure in construction firm Access Engineering weighed on the index amid political concerns over a tight January 8 presidential election, stockbrokers said.

The main stock index was down 0.25 per cent or 18.58 points at 7,272.75 at 0558 GMT, its highest close on December 24. Turnover was thin, at 270.1 million rupees ($2.06 million).

Shares in Access Engineering were down 1.5 per cent.

“There is selling pressure on Access Engineering. The market is still waiting for some clear direction on the political front with an expected tight election,’’ a stockbroker said on condition of anonymity.

Conglomerate John Keells Holdings, which helped boost turnover, was up 0.8 per cent.

Defections ahead of election

Analysts said defections ahead of the election have hurt the sentiment.

Since President Mahinda Rajapaksa announced snap elections last month, 23 legislators, including former health minister Mithripala Sirisena, who is challenging Rajapaksa’s bid for a third term, have defected. Two Opposition legislators have joined the ruling party.

Political parties mainly representing Sri Lanka’s minority Tamils and Muslims, who account for a quarter of the total vote, have said they will back Sirisena in the poll.

Rupee forwards

In the forex market, the four-day rupee forwards, or spot-next-next, were traded at 132.10/20 per dollar at 0606 GMT compared with Tuesday’s close of 132.05/132.15, dealers said.

“There is importer demand and the one-week forward was traded at 132.35/50 after banks did not trade four-day forwards below 132.10 due to moral suasion (by the central bank),’’ a currency dealer said.

Rupee forwards have been pegged at around 132.00 through the month after the central bank defended the currency through moral suasion.

Central bank officials were unavailable for comment.

The spot currency was not traded.

($1 = 131.4000 Sri Lankan rupees)

(The Hindu Businessline)