Sri Lanka stock exchange halts trade again as shares see massive plunge

Sri Lanka crisis: Monday was the first morning of trade on the Colombo bourse following a weeklong Sri Lankan New Year holiday and a five-day trading halt after the government raised interest rates and defaulted on its foreign debt.

The share market in crisis-torn Sri Lanka plunged nearly 13 per cent leading to halting of trade for the second time this month on Monday, after resuming from a two-week break.

Sri Lankan students protest outside the residence of Prime Minister Mahinda Rajapaksa in Colombo on Sunday.(AP)

Monday was the first morning of trade on the Colombo bourse following a weeklong Sri Lankan New Year holiday and a five-day trading halt after the Gotabaya Rajapaksa-led government raised interest rates and defaulted on its $51 billion foreign debt.

The island nation is grappling with its worst economic crisis in decades, with regular blackouts and acute shortage of essentials, including food and fuel amid intensified civil protests against the government.

The country’s equities have shed nearly 40 percent of their value since January, with the local currency falling by a similar amount.

The local S&P index fell seven per cent in the opening minute of trade, more than the five percent needed to trigger an automatic half-hour halt, an AFP report said.

Last week, the government had sent its officials to Washington to negotiate with the International Monetary Fund (IMF) for a bailout, but the lender was yet to offer any emergency funding.

At present, Colombo is heavily dependent on India, China and Japan to help keep the country afloat.

(With agency inputs)