Bearish start for stock market in new week

The Colombo stock market began the new week on a negative note with bearish investor sentiments yesterday. 

The benchmark ASPI was down by 1.5%, whilst active S&P SL20 dipped by 1.7%. Turnover was Rs. 1.1 billion involving 54 million shares. 

Asia Securities said the market continued its bearish momentum yesterday with the ASPI dropping 1.5% and the S&P SL20 index losing 1.7%. 

Notably, the ASPI broke below the immediate support at 10,900 amidst a broader market pullback as investors remained on the sidelines, seeking clarity on the macroeconomic front and the upcoming earnings season. Sharp price declines were observed in CALT (-6.5%), CFVF (-5.1%), LIOC (-3.6%), EXPO (-3.8%), COMBN (-2.5%), and MGT (-4.2%). 

“However, we believe the current breakout and deeper pullback can attract buying interest in fundamentally strong stocks at discounted prices, especially considering the overall retracement from its recent swing high level of 11,750,” it added. 

This was evident as the ASPI rebounded from an intra-day low of 10,731 (-256 points or -2.3%) in early trading to close the session at 10,824 (-162 points or -1.5%) supported by late-day buying in CALT, CFVF, SAMP, SLTL, COMBN, and HNBN at lower price levels. Turnover came in at Rs. 1.1 billion (previous session-Rs. 611 million) led by CALT (Rs. 152 million), JKH (Rs. 128 million), and HAYL (Rs. 110 million). COMBN (-14 points), NDB (-11 points), and MELS (-10 points) came in as the biggest laggards on the ASPI for the day. 

Foreigners recorded a net inflow of Rs. 70.1 million while their participation increased to 10.1% of turnover (previous day 8.9%). Net foreign buying topped in JKH.N at Rs. 61.7 million ($ 191 k) while net foreign selling topped in UBF.N at Rs. 10.5 million. 

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Distilleries and Hayleys. Mixed interest was observed in Capital Alliance, Lanka IOC and Expolanka Holdings whilst retail interest was noted in UB Finance Company, Browns Investments and LOLC Finance. Foreign participation in the market activity remained at subdued levels with foreigners closing as net buyers. The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings and Hayleys), whilst the sector index lost 1.32%. The share price of John Keells Holdings lost Rs. 2.25 to Rs. 188.25. The share price of Hayleys moved down by Rs 1.50 to Rs. 88.00. 

The Diversified Financials sector was the second highest contributor to the market turnover (due to Capital Alliance) whilst the sector index decreased by 1.83%. The share price of Capital Alliance decreased by Rs. 4.40 to Rs. 62.80. Lanka IOC and Expolanka Holdings were also included amongst the top turnover contributors. The share price of Lanka IOC recorded a loss of Rs. 4 to Rs. 108. The share price of Expolanka Holdings declined by Rs. 5 to Rs. 125.