Stock market remains negative despite PM’s broader assurances

The Colombo stock market dipped for the second consecutive day as investors remained bearish despite broader assurances on the road ahead to economic stability and recovery by Prime Minister Ranil Wickremesinghe in Parliament yesterday. 

The active S&P SL20 declined by over 3% and the benchmark ASPI by over 2%. Turnover improved yesterday to Rs. 1.9 billion involving 96 million shares. It was a choppy day for the indices though the market managed to ensure full day’s trading unlike Monday’s early closure after the S&P SL20 plunged by 5% triggering the circuit breaker.

Asia Securities said the indices extended sharp losses for a second consecutive session yesterday due to retail and HNI pressure as forced selling and margin calls continued in heavyweight stocks. EXPO (-6.1%), LOLC (-11.2%), LOFC (-5.2%), and BIL (-3.4%) ended lower, however renewed bargain buying was seen during closing hours. 

Turnover reached a two-week high led by EXPO (Rs. 540 million), BIL (Rs. 211 million), and LIOC (Rs. 206 million). Earlier, the ASPI touched an intra-day low of 7,563 (241 points or 3.1%) in the first hour of trading, however, the index saw a healthy recovery at the back end of the session and touched 7,720 (-89 points) before settling at 7,631 (172 points). Overall, 45 stocks ended higher while 150 closed lower.

Asia also said foreigners recorded a net outflow of Rs. 112.6 million while their participation increased to 12.0% of turnover (previous day 2.3%). Net foreign buying topped in JKH at Rs. 46.4 million and selling topped in CTHR at Rs. 156.3 million.

First Capital said the bourse closed in the red with investors booking profits over the cautionary comments made by the Prime Minister, urging to use fuel and LP gas sparingly while the Government rectifies shortages in the same. 

Moreover, the PM commented on a potential food shortage, adding to the woes. Index opened with a heavy downfall hitting an intraday low of 7,560. However, by mid-day the index bounced back as investors beat the market on index-heavy counters, recovering half of the losses but failed to recoup completely before closing for the day at 7,631 losing 172 points. 

Turnover improved from the previous session led by a joint contribution of 48% from the Transportation sector and Food, Beverage and Tobacco sector. 

NDB Securities said high net worth and institutional investor participation was noted in C T Holdings, Melstacorp, and Waskaduwa Beach Resort. Mixed interest was observed in Expolanka Holdings, Lanka IOC and LOLC Holdings whilst retail interest was noted in Browns Investments, SMB Leasing and LOLC Finance. 

Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) whilst the sector index lost 6.10%. The share price of Expolanka Holdings decreased by Rs. 11.75 (6.10%) to close at Rs. 180.75.

Food, Beverage and Tobacco sector was the second-highest contributor to the market turnover (due to Browns Investments and Melstacorp) whilst the sector index decreased by 2.55%. The share price of Browns Investments lost 30 cents (3.45%) to close at Rs. 8.40. The share price of Melstacorp declined by Rs. 2.10 (4.99%) to close at Rs. 40.

Lanka IOC and C T Holdings were also included amongst the top turnover contributors. The share price of Lanka IOC moved up by Rs. 2.50 (4.17%) to close at Rs. 62.50. The share price of C T Holdings recorded a loss of Rs. 3.75 (2.29%) to close at Rs. 160.