Stock market rebounds on fresh buying of sound mid-caps; better earnings

The Colombo stock market managed to rebound yesterday on fresh buying on sound mid-caps and better corporate earnings after a sharp dip of over 4% on Wednesday. 

Acuity Stockbrokers said the Bourse ended on a positive note as the ASPI increased by 1.53% or 87.22 points to close at 5,771.89 points, while the S&P SL20 Index also increased by 0.32% or 7.29 points to close at 2,294.89. Carson's, SLT, Bukit, Commercial Leasing and Distilleries contributed most to the ASPI's gain.

Turnover decreased by 30.0% to Rs. 2.2 billion while the Expolanka Holdings accounted for 19.6% of the day’s total turnover. 

First Capital said earnings season optimism overruled the fear of second COVID-19 wave, reverting the market back to the positive territory after two consecutive days of downfall. 

“Index experienced a spike within the early hour of trading, thereafter recorded a downtrend till mid-day. Market experienced a gradual upwards movement for the rest of the session and closed at 5,772 with an advance of 87 points,” it added.

Materials counters led the turnover for the session closely followed by Capital Goods and Transportation counters, making a joint contribution of 60%. 

Asia Securities said trading started with selling in the opening few minutes but saw a quick and sharp recovery as retail, HNI and institutional investors latched onto midcap stocks that were sold down to unwarranted levels yesterday. “Institutional investors witnessed active buying into blue-chip stocks which also saw a sell down to unwarranted levels on Wednesday,” it added. 

NDB Securities said the ASPI closed in green as a result of price gains in counters such as Carson Cumberbatch, Sri Lanka Telecom and Bukit Darah.

It said high net worth and institutional investor participation was noted in John Keells Holdings, Hatton National Bank and Sampath Bank. Mixed interest was observed in Expolanka Holdings, Tokyo Cement Company voting and non-voting, whilst retail interest was noted in ACL Cables, RIL Property and Browns Investments. 

Materials sector was the top contributor to the market turnover (due to Tokyo Cement Company non-voting and voting), whilst the sector index gained 2.87%. The share price of Tokyo Cement Company non-voting gained Rs. 1.50 (2.97%) to close at Rs. 52.00. The share price of Tokyo Cement Company recorded a gain of Rs. 1.50 (2.54%) to close at Rs. 60.60.

Transportation sector was the second highest contributor to the market turnover (due to Expolanka Holdings), whilst the sector index increased by 4.63%. The share price of Expolanka Holdings increased by Rs. 0.80 (4.65%) to close at Rs. 18.00.

John Keells Holdings and Sampath Bank were also included amongst the top turnover contributors. Furthermore, the share price of John Keells Holdings moved down by Rs. 1.10 (0.83%) to close at Rs. 131.50, whilst the share price of Sampath Bank declined by Rs. 0.30 (0.25%) to close at Rs. 121.80.

Foreign investors recorded a net outflow of Rs.. 50.8 million, lower compared with Rs.. 166 million net selling on Wednesday.