Stock market rebounds but investor sentiment remain fragile

The Colombo stock market bounced back yesterday though modestly after its sharp plunge of 5% on Monday though turnover signalled the uneasy investor sentiment.

The All Share Price Index and the S&P SL20 managed to close marginally on the up by 1 and 4 points respectively. Turnover was just Rs. 2.8 billion involving 103.5 million shares.  

Asia Securities said the benchmark indices closed nearly unchanged after witnessing a bout of volatility in the first half of the session as retail and HNI investors took to the side-lines, maintaining a cautious approach following Monday’s sharp declines. 

Market commenced on a negative note today as the ASPI opened with a gap-down of 80 points to scale an intra-day low of 11,511 in the first ten minutes of trading. Subsequently, the index surged as much as 222 points to an intra-day high of 11,733 in the next few minutes, boosted by a sharp pick up in prices of EXPO, VONE, COMB, SAMP, KVAL, and AGAL. Following the upsurge, the ASPI reversed its course, declining 145 points to 11,588 weighed by losses in heavyweights LOLC, HAYL, SFCL and HNB. 

“The index saw another upswing of 119 points to 11,707 in mid-afternoon trade and oscillated in the range of 11,650-11,700 until market close, with a drop of 58 points recorded in the last thirty minutes of trading,” Asia said. 

Front-line stocks ended mixed as EXPO (+0.4), VONE (+5.0%), LOFC (+0.9%), AAIC (+1.6%) and DIAL (+0.9%) ended in green while LOLC (-1.4%), RCL (-0.3%), HAYL (-1.3%) and TKYOX (-4.4%) settled with losses. Importantly, foreigners were on the buying side for the third consecutive session with a net inflow of Rs. 82 million led by net buying in EXPO (Rs. 42.6 million) and DIAL (Rs. 20.5 million) Overall, 101 stocks ended higher while 112 closed in red.

First Capital said the bourse slightly recovered to the green territory after 4 consecutive days despite recording a 1-week low turnover. 

“The Index displayed sizable volatility while starting the session with another straight fall yet managed to recover and hit an intraday high at 11,745 within the first hour of the session. With the continuous panic selling, market significantly dropped from an intraday high but managed to trade in the green zone for the rest of the session and closed the day at 11,592, with a marginal gain of 1 point. 

“With the positive earnings outcome, banking counters contributed favourably to the index movement,” First Capital said. It added that the turnover was led by a joint contribution of 43% from Capital Goods and Diversified Financials sectors. 

NDB Securities said high net worth and institutional investor participation was noted in LOLC Holdings, ACL Cables and Vallibel One. Mixed interest was observed in Expolanka Holdings, Royal Ceramics and Commercial Leasing & Finance whilst retail interest was noted in Browns Investments, Industrial Asphalts and Lanka Orix Finance. 

The Capital Goods sector was the top contributor to the market turnover (due to Royal Ceramics) whilst the sector index edged up 0.03%. The share price of Royal Ceramics recorded a loss of 20 cents (0.33%) to close at Rs. 61.10.

The Diversified Financials sector was the second highest contributor to the market turnover (due to LOLC Holdings and Commercial Leasing & Finance) whilst the sector index closed down 1.07%. The share price of LOLC Holdings lost Rs. 14 (1.38%) to close at Rs. 999. The share price of Commercial Leasing & Finance closed flat at Rs. 42.70.

Expolanka Holdings and Browns Investments were also included amongst the top turnover contributors. The share price of Expolanka Holdings increased by one Rupee (0.35%) to close at Rs. 286.50. The share price of Browns Investments closed flat at Rs. 13.

Separately Laxapana Batteries announced an interim dividend of 75 cents per share.