Stock market on slippery slope as 5% dip in S&P trigger trading halt

The Colombo stock market suffered a mini crash yesterday, including a 30-minute mark halt as besieged investor sentiment persisted.

The All Share Price Index (ASPI) declined by 3.5% or 268 points, whilst the S&P SL20 plunged by 4.3% or 131 points. Closing level of indices reflect a marginal recovery as S&P SL20 crashed by 5% one hour before scheduled close of trading, triggering a cooling period of 30 minutes. 

Turnover was a below average Rs. 2.8 billion. 

Blue chips Expolanka, Vallibel One, John Keells Holdings (JKH), LOLC and Browns Investments contributed most to the dip in ASPI.

First Capital said bourse continued the downfall for the second consecutive session while recording a 6-week low. 

“Index experienced a downtrend followed by an upward movement during the early hour of trading. Thereafter, witnessed a strong downward movement, recording a market halt during mid-day due to the S&P SL20 falling below 5%. Later, market recorded a short-lived uptrend and closed at 7,329, losing 268 points,” it said. 

The Materials sector took over the lead of the turnover for the session, closely followed by the Capital Goods sector making a joint contribution of 42%. Parcel trades in SAMP, COMB and AEL amounted to 6% of turnover. 

NDB Securities said the ASPI closed in red for the second consecutive day due to broad-based selling. The S&P SL20 triggered a circuit breaker at 1:28 p.m. After the 30-minute trading halt, the ASPI and the

S&P SL20 marginally recovered to close at a loss of 3.53% and 4.34% respectively. Moreover, 22% of the market drop were contributed by price losses in counters such as Expolanka Holdings, Vallibel One and JKH.

It said high net worth and institutional investor participation was noted in Sampath Bank, Commercial Bank and Access Engineering. Mixed interest was observed in Royal Ceramics, LOLC Holdings and Hayleys, whilst retail interest was noted in Dipped Products, Expolanka Holdings and Haycarb. 

The Materials sector was the top contributor to the market turnover (due to Dipped Products), whilst the sector index lost 6.59%. The share price of Dipped Products moved down by Rs. 6.60 (11.83%) to close at Rs. 49.20. 

The Capital Goods sector was the second highest contributor to the market turnover, whilst the sector index decreased by 5.75%. Expolanka Holdings, Browns Investments, LOLC Holdings and Commercial Bank were also included amongst the top turnover contributors. The share price of Expolanka Holdings decreased by Rs. 3.80 (8.58%) to close at Rs. 40.50. Furthermore, the share price of Browns Investments lost Rs. 0.40 (6.90%) to close at Rs. 5.40. The share price of LOLC Holdings recorded a loss of Rs. 12.75 (3.38%) to close at Rs. 364.00, whilst the share price of Commercial Bank declined by Rs. 3.00 (3.37%) to close at Rs. 86.00.

Net foreign selling yesterday was Rs. 197 million as against net buying of Rs. 42 million on Monday. 

Capital Trust said while the market’s recent downward trend has certainly been disappointing, it advise investors to take advantage of the current weakness and focus on accumulating fundamentally robust and liquid stocks in high growth sectors with a long term investment horizon.