Stock market suffers 2% dip ahead of mini-Budget

The Colombo stock market yesterday dipped sharply by 2% with low turnover ahead of the upcoming mini-Budget next week.

The active S&PSL20 dipped by 2.6% and the benchmark ASPI by 2%. Turnover was Rs. 2.1 billion involving 104 million shares. 

Asia Securities said indices closed sharply lower due to a broad-based pullback as investors resorted to a cautious approach ahead of the budget scheduled for next week. 

The ASPI ended below the 9,000 level with a loss of 183 points (-2.0%) largely due to price declines in LIOC (-5.0%), EXPO (-4.0%), LOLC (-4.1%), HAYL (-5.0%), and VONE (-4.6%) while plantation sector, which saw a healthy run in the last few sessions, also witnessed pullback with KOTA (-9.5%), KAHA (-8.0%), KVAL (-4.1%), and MASK (-6.9%) leading the decline. Turnover was led by LIOC (Rs. 344 m), EXPO (Rs. 244 m), and WIND (Rs. 124 m). Overall, 54 stocks ended with gains while 157 recorded price losses during the session.

Asia also said foreigners recorded a net inflow of Rs. 49.7 million while their participation increased to 4.3% of turnover (previous day 2.4%). Net foreign buying topped in CARG at Rs. 30.6 million and selling topped in LLUB at Rs. 37.6 million.

First Capital said the broad market closed the day in red with profit taking visible on selected shares as investors cut their margin positions ahead of the month end. 

Further, the upcoming budget and possible increase in taxes on corporates, also contributed towards the negative sentiment prevailing in the market. As a result, index witnessed a steep fall since the beginning of the session and continued to descend as retailers realised profits on heavy weights which gained during the past few sessions. Accordingly, the index dropped below 9,000 level and closed the day at 8,828, losing 183 points. Turnover dropped to three and half week low of Rs. 2.1 billion (-33% from monthly average turnover of Rs. 3.2 b) while Food, Beverage and Tobacco and Energy sectors continued to lead the market turnover with a joint contribution of 34%. 

NDB Securities said high net worth and institutional investor participation was noted in Windforce Ltd., Chevron Lubricants and Cargills. Mixed interest was observed in Lanka IOC, Expolanka Holdings and Hayleys whilst retail interest was noted in Asia Siyaka Commodities, LOLC Finance and Browns Investments. 

The Food, Beverage & Tobacco sector was the top contributor to the market turnover whilst the sector index lost 1.79%. Energy sector was the second highest contributor to the market turnover (due to Lanka IOC) whilst the sector index decreased by 5.03%. The share price of Lanka IOC decreased by Rs. 9.00 (5.01%) to close at Rs. 170.50.

Expolanka Holdings, Windforce Ltd., LOLC Finance and Asia Siyaka Commodities were also included amongst the top turnover contributors. The share price of Expolanka Holdings lost Rs. 8.75 (3.96%) to close at Rs. 212. The share price of Windforce Ltd. moved up by 70 cents (4.38%) to close at Rs. 16.70. The share price of LOLC Finance recorded a gain of 30 cents (3.90%) to close at Rs. 8. The share price of Asia Siyaka Commodities appreciated by 20 cents (4.88%) to close at Rs. 4.30.

Separately Kelani Tyres and ACL Cables announced their interim dividends of Rs. 5 and 

Rs. 1 per share respectively.