Locals remain bearish at CSE; foreigners bullish

The Colombo stock market remained bearish driven by locals though foreigners continued to be net buyers.

Both indices declined by 0.5% whilst turnover was lower at Rs. 3 billion involving 81 million shares.

Asia Securities said the market closed in red as investors continued to book profits for a third consecutive session while maintaining a “wait-and-see” approach.

Banking stocks extended pullback with a notable drop in prices of HNBN (-2.1%), COMBN (-2.4%), and NDBN (-2.3%). However, the Insurance sector saw a pick-up in buying interest led by JINS (+7.0%), PINS (+8.0%), and AAIC (+3.4%). Meanwhile, CALT (+2.9%) and MGT (+2.5%) continued to record price gains on retail buying.

The ASPI initially reached an intra-day low of 11,229 (-110 points), however saw a gradual recovery throughout the rest of the session to close at 11,279 (-59 points).

The breadth of the market was neutral with 91 price gainers and 95 decliners. COMBN (-17 points), HNBN (-11 points), and JKH (-5.5 points) came in as the major laggards during the session.  

A net foreign inflow of Rs. 142 million was recorded for the day supported by HNBN (Rs. 93 million) and MELS (Rs. 59 million). Foreign selling topped in COMB.N at Rs. 21.5 million.

First Capital said the overall market sentiment remained bearish, marking its third consecutive decline amidst moderate trading volumes. The day commenced in a negative tone, as the market experienced an initial drop of over 100 points during the morning session, but recovered towards mid-day, ultimately closing in red at 11,279, losing nearly 60 points.

This was predominantly attributed to profit-taking activities involving the banking and index heavyweight counters. Notably, there was a growing interest among retail investors in treasury shares, driven by the anticipation of the upcoming T-bill auction, which is to be held today and the forthcoming monetary policy review.

The consumer services and insurance sectors also witnessed renewed investor interest throughout the day. The turnover was significantly driven by the Banking and Diversified Financials sectors, which collectively contributed 55% to the overall turnover.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Hatton National Bank, and Melstacorp. Mixed interest was observed in Capital Alliance, Hayleys Fabric and First Capital whilst retail interest was noted in Pan Asia Banking Corporation, Union Bank and Softlogic Capital.

The Banking sector was the top contributor to the market turnover (due to Hatton National Bank and Pan Asia Banking Corporation) whilst the sector index lost 1.11%. The share price of Hatton National Bank decreased by Rs. 3.75 to Rs. 176.00. The share price of Pan Asia Banking Corporation appreciated by 60 cents to Rs. 22.80.

The Diversified Financials sector was the second highest contributor to the market turnover (due to Capital Alliance) whilst the sector index decreased by 0.72%. The share price of Capital Alliance gained Rs. 2.60 to Rs. 92.

John Keells Holdings and Hayleys Fabric were also included amongst the top turnover contributors. The share price of John Keells Holdings moved down by Rs. 1.75 to Rs. 190.75. The share price of Hayleys Fabric recorded a gain of Rs. 1.10 to Rs. 45.90.