Communal violence: Sri Lankan stocks drop to near 3-week closing low

Analysts said local investors continued to be on the sidelines as they were still worried about political uncertainty

Sri Lankan shares dropped to their lowest close in nearly three weeks on Tuesday amid investors’ concerns about communal violence.

The country declared a nationwide state of emergency for 10 days on Tuesday to stop the spread of violence, after clashes erupted between majority Buddhists and members of the minority Muslim community.

“Market came down with investors worried over the government declaring state of emergency,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

“Investors are waiting to see how foreign investors will react to this state of emergency.”

The Colombo stock index ended 0.3 percent weaker at 6,533.46, following a