Traders sit below an electric stock board while working on the floor of the Colombo Stock Exchange in the central business district of Colombo, Sri Lanka, on Monday, July 21, 2015. The South Asian island nation's outstanding foreign debt increased by 5.2 percent to 3.1 trillion rupees ($23 billion) in 2014, according to a central bank annual report, of which 52.1 percent was on non-concessional terms. Photo: Kuni Takahashi/Bloomberg via Getty Images

Sri Lankan shares recovered on Tuesday (20) from a near two-week closing low in the previous session, led by financials and consumer staples, but trading volume was light as investors waited for more clarity on the political front.

The benchmark stock index ended 0.74 per cent firmer at 5,912.46, recovering from its lowest close since August 6 hit on Monday. The index posted a loss of 0.82 per cent last week, its first weekly decline in eight.

Investors have been in a wait-and-see mode after the main opposition party named a hard-line former defence chief as its presidential candidate, to capitalise on public clamour for a decisive leader.

The market has been looking forward to hearing policies from former defence chief Gotabaya Rajapaksa as well as the ruling party’s presidential candidate who is yet to be announced, dealers said.

Gotabaya, 70, served under his older brother, ex-president Mahinda Rajapaksa, and is widely seen as the front runner in a presidential election that must be held before December 9.

The market had gathered strength early this month amid speculations of the wartime defence chief contesting for presidency, dealers said.

So far this year, the stock index has dropped about 2.3 per cent.

Turnover was 383.9 million rupees ($2.16 million) on Tuesday, nearly half of this year’s daily average of about 653.6 million rupees so far. Last year’s daily average came in at 834 million rupees.

Large cap Ceylon Tobacco Company gained 3.6 per cent and top conglomerate John Keells Holdings rose 1.4 per cent, pushing the overall index up.

The rupee ended 0.4 per cent weaker at 178.00/05 per dollar, compared to Monday’s close of 177.30/50. The currency was down 0.2 per cent for the last week, but is up nearly 2.6 per cent so far this year.

Foreign investors bought a net 0.61 million rupees worth of government securities in the week ended August 13. But the market has suffered year-to-date net foreign outflow of 28 billion rupees, central bank data showed.

Reuters