Stock market begins fresh week with circuit breaker after S&P SL20 plunges by 5%

• ASPI dips below 8,000-point mark; foreigners net buyers

The Colombo stock market began a fresh week with a circuit breaker after the active S&P SL20 index plunged by 5% forcing an early close.

The benchmark ASPI was down by 3% on a day impacted by forced selling and negative investor sentiment over the worsening economic and political situation despite efforts by the President Gotabaya Rajapaksa-Prime Minister Ranil Wickremesinghe’ s interim-Government to bring stability. Turnover was only Rs. 1.46 billion involving 73 million shares. 

Asia Securities said the indices recorded a steep decline due to retail and HNI selling pressure, underpinned by margin calls and forced selling, in heavyweight stocks EXPO, BIL, LOLC and LOFC. The decline in the S&P SL20 Index reached 5% (109 points) at the back end of the session, triggering the circuit-breaker and leading to a market-wide trade halt for the day while the ASPI ended below the 8,000 level at 7,804 (251 points or 3.1%). 

Actively trading counters EXPO (-8.7%), BIL (-9.4%), LOLC (-11.1%), LOFC (-9.4%), HAYL (-4.1%) and AAIC (-10.7%) ended with sharp losses for the day. Turnover was led by EXPO (Rs. 496 million) and BIL (Rs. 324 million). The breadth of the market ended weak with 25 price gainers and 167 decliners.

Asia also said foreigners recorded a net inflow of Rs. 49.5 million while their participation increased to 2.3% of turnover (previous day 1.0%). Net foreign buying topped in AHUN at Rs. 19.2 million and selling topped in LWL at Rs. 2.1 million.

First Capital said the Bourse plunged deeply into the red zone as investors were compelled to set on a selling spree following PM’s comments on food and economic crisis to hit peak in near future. As a result, the index dragged down below 8,000 level and continued to tumble for the rest of the session.

As the S&P SL20 index dropped over 5.0% from the previous close due to the pressure from margin providers getting escalated, the market halted and closed the day at a 3-week low of 7,804 losing 251 points. Turnover improved led by Transportation and Food, Beverage and Tobacco sectors accounting for a joint contribution of 59%. 

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings and CIC Holdings. Mixed interest was observed in Expolanka Holdings, Lanka IOC and Hayleys whilst retail interest was noted in Browns Investments, LOLC Finance and SMB Leasing. Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings) whilst the sector index lost 8.66%. The share price of Expolanka Holdings decreased by Rs. 18.25 (8.66%) to close at Rs. 192.50.

Food, Beverage and Tobacco sector was the second-highest contributor to the market turnover (due to Browns Investments) whilst the sector index decreased by 2.55%. The share price of Browns Investments lost 90 cents (9.38%) to close at Rs. 8.70.

Lanka IOC, Hayleys and LOLC Holdings were also included among the top turnover contributors. The share price of Lanka IOC moved down by Rs. 3 (4.76%) to close at Rs. 60. The share price of Hayleys recorded a loss of Rs. 2.70 (4.07%) to close at Rs. 63.70. The share price of LOLC Holdings declined by Rs. 65.25 (11.10%) to close at Rs. 522.50.