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. (Photo: Kuni Takahashi/Bloomberg via Getty Images)

The government’s pension fund has resumed investing in risky assets as the stock market is “extremely undervalued at the moment and is considered a good time to go in”, the Central Bank governor said last month at its monetary policy meet.

Monday’s stock market turnover was Rs.2.18 billion, its highest since February 11 and more than four times this year’s daily average of about Rs.545.6 million. Last year’s daily average was Rs.834 million.

Foreign investors sold a net Rs.27.9 million worth of shares on Sunday (16), extending the net foreign outflow for the past six days to Rs.416.3 million. The year-to-date net foreign outflow now stands at Rs.5.94 billion.

The rupee ended at 176.75/85 per dollar, compared with Friday’s close of 176.70/90, market sources said.

Analysts expect the rupee to weaken further as money flows out of stocks and government securities.

The rupee fell 0.14 per cent last week but is up 3.31 per cent for the year. Exporters had converted dollars as investors’ confidence stabilised after a US $ 1 billion sovereign bond was repaid in mid-January.

The rupee dropped 16 per cent in 2018 and was one of the worst-performing currencies in Asia.

Foreign investors bought a net Rs.311 million worth of government securities in the week ended June 12, but the island nation’s net foreign outflow was at Rs.21.6 billion so far this year, the Central Bank data showed.