Bearish sentiment returns to Bourse

Friday, 31 March 2023 00:30 - - {{hitsCtrl.values.hits}}

The Colombo stock market yesterday reverted to bearish mode after a positive gain the previous day amidst low activity.

Both indices dipped by over 0.3% and turnover was Rs. 912.6 million involving 45.6 million shares. The market also saw net foreign outflow.

Asia Securities said indices closed in red dragged by price losses in NTB (-1.3%), SLTL (-6.8%), NDBN (-5.5%), COMBN (-1.7%), COMBX (-1.8%), DFCC (-5.2%), LOFC (-1.6%), AAIC (-2.9%), and SCAP (-3.5%). Nevertheless, retail buying was witnessed in LIOC (+2.2%), and SAMP (+2.3%) during the session.

Earlier, the ASPI opened trading on a positive note reaching a high of 9,325 (+53 points) at market open. Thereupon, the index reversed course and stayed in negative territory for the rest of the session to close at 9,229 (-44 points). Overall, 45 stocks ended in green while 120 settled with losses.

On the activity front, retail and HNI investors remained on the sidelines awaiting directional cues due to speculations over domestic debt restructuring. Market turnover was led by LIOC (Rs. 124 million), SAMP (Rs. 72 million), and NTBN (Rs. 62 million).

Asia also said foreigners recorded a net outflow of Rs. 90.4 million. Net foreign buying topped in SUN at Rs. 4.9 million and selling topped in NTB.N at Rs. 60 million.

First Capital said the ASPI reverted to red territory losing 44 points triggered by month-end margin calls and extended panic selling. In the midst of rising concerns on the possible debt restructuring (DDR), hefty selling pressure emerged on the Banking sector where COMB, NDB and DFCC largely dragged the index down.

It said although the index started the day on a bullish note gaining over 50 points in the beginning it failed to hold on to the position as investors exited selected stocks amidst the pressure on margin calls. Moreover, as LIOC is expected to hold the market leadership position among the private companies given the expansion of new sheds, investor interest reactivated on the stock which largely contributed to the turnover.

Investor participation continued to regress as retailers remained on the sidelines awaiting clarity on the DDR.

NDB Securities said high net worth and institutional investor participation was noted in Nations Trust Bank, Dialog Axiata and Melstacorp. Mixed interest was observed in Lanka IOC, Sampath Bank and Sri Lanka Telecom whilst retail interest was noted in SMB Leasing (nonvoting and voting), LOLC Finance and Browns Investments.

The Banking sector was the top contributor to the market turnover (due to Sampath Bank and Nations Trust Bank) whilst the sector index lost 0.78%. The share price of Sampath Bank gained Rs. 1.20 to Rs. 54.10. The share price of Nations Trust Bank moved down by 80 cents to Rs. 59.10.

The Food, Beverage & Tobacco sector was the second highest contributor to the market turnover whilst the sector index decreased by 0.60%.

Lanka IOC, Sri Lanka Telecom and Dialog Axiata were also included amongst the top turnover contributors. The share price of Lanka IOC increased by Rs 3.75 to Rs 173.25. The share price of Sri Lanka Telecom recorded a loss of Rs. 7.05 (6.83%) to Rs. 96.20. The share price of Dialog Axiata appreciated by 10 cents to Rs. 10.50.