Sri Lankan shares fall as industrials drag; economy contracts in first quarter

June 28 (Reuters) - Sri Lankan shares fell nearly 2% on Tuesday, weighed down by industrials and financials, as the country ended a fuel duopoly to ease shortages amid its worst economic crisis in decades.

* Sri Lanka's economy contracted by 1.6% in the January-to-March quarter, data released by the statistics department after market hours on Tuesday showed.

* Sri Lanka will allow companies from oil-producing countries to import and sell fuel, the power and energy minister said on Tuesday.

* The CSE All-Share index closed 1.87% lower at 7,312.66, falling for a second consecutive session.

* Sri Lanka is currently facing its worst economic crisis in seven decades, unable to pay for essential imports such as fuel and medicine due to a severe shortage of foreign exchange.

* The island nation is also facing the possibility of running out of staples, especially rice, partly due to a fall in production because of a now-reversed ban on chemical fertiliser last year.

* Meanwhile, the central bank of Sri Lanka said https://bit.ly/3yqwbQF the advisory committee established by the monetary board determined that proposals from prospective investors were not viable for revival of five failed licensed finance companies.

* The five companies were Central Investments & Finance Ltd, ETI Finance Ltd, TKS Finance Ltd, The Finance Company Plc and The Standard Credit Finance Ltd, of which licenses have been either cancelled or suspended.

* On the CSE All-Share index, trading volume fell to 43.8 million shares from 56.2 million shares in the previous session.

* The equity market turnover was 815.3 million Sri Lankan rupees ($2.29 million), according to exchange data.

* Foreign investors were net buyers in the equity market, purchasing 27.7 million rupees worth of shares, while domestic investors were net sellers, offloading 808.1 million rupees worth of shares, according to exchange data.

* For a report on global markets, click ($1 = 356.0000 Sri Lankan rupees) (Reporting by Nallur Sethuraman and Rama Venkat in Bengaluru; Editing by Krishna Chandra Eluri)