CSE begins October negative as macro issues dampen investor sentiment

The Colombo stock market yesterday began the new month of October on a negative note influenced by concerns over macro issues with indices dipping by over 1.4% amidst moderate turnover. 

The active S&P SL20 was down by 1.47% and the benchmark ASPI by 1.52%. Turnover was RTs. 686.7 million involving 23 million shares.

With yesterday’s dip, the year-to-date ASPI’s return stood at 31.5% and S&P SL20 at 19.5%.

Asia Securities said the indices showcased a downward movement as investors took the sidelines, waiting for macro cues regarding the IMF financial assistance and a potential hike in electricity tariffs. Moreover, the fuel price hike announced yesterday further dampened market momentum. The indices hit a one-month low with the ASPI declining 172 points (-1.5%) and the S&P SL20 dropping 47 points (-1.5%). SAMP (-14 points), COMBN (-14 points), and CINS (-12 points) came in as the biggest laggards on the ASPI. Overall, 150 stocks ended lower while 32 stocks managed to close in green.

Asia also said foreigners recorded a net outflow of Rs. 70.4 million. Net foreign buying topped in LIOC at Rs. 3.3 million and selling topped in JKH at Rs. 75.1 million.

First Capital said the bourse faltered heavily with a 1 ½ - month high intraday loss following IMF’s decision to hold up on the 2nd tranche of the EFF given the country’s failure in meeting important milestones within the EFF program. 

The ASPI plunged steeply low amidst aggressive selling pressure despite the credit upgrading for Sri Lanka by S&P and Fitch. With losses seen broadly across all listed sectors, the index closed in the red at 11,164 losing 172 points. However, on the flipside investors reverted to hold positions on defensive counters within the Utilities and Healthcare segments. 

Turnover displayed poor performance falling 53% below the monthly average turnover of Rs. 1.5 billion. 

NDB Securities said high net worth and institutional investor participation were noted in John Keells Holdings and Hatton National Bank. Mixed interest was observed in Lanka IOC, Pan Asia Banking Corporation and Hayleys Fabric whilst retail interest was noted in Browns Investments, Softlogic Capital and SMB Leasing. 

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) whilst the sector index lost 1.33%. The share price of John Keells Holdings decreased by Rs. 2.25 (1.17%) to Rs. 190.50.

The Banking sector was the second highest contributor to the market turnover (due to Hatton National Bank and Pan Asia Banking Corporation) whilst the sector index decreased by 2.56%. The share price of Hatton National Bank moved down by Rs. 3.50 to Rs. 168.50. The share price of Pan Asia Banking Corporation declined by 70 cents to Rs. 19.50.

Lanka IOC and Softlogic Capital were also included among the top turnover contributors. The share price of Lanka IOC lost Rs. 1.25 to Rs. 115. The share price of Softlogic Capital recorded a loss of 30 cents to Rs. 11.10.