Panic selling triggers market halt; modest but welcome net foreign inflow

Panic selling owing to spike in COVID-19 cases locally triggered a market halt yesterday at the Colombo Bourse, which closed sharply lower compared to Friday.

The ASPI decreased by 2.26% or 112.86 points to close at 4,879.76 points, while the S&P SL20 Index also decreased by 3.18% or 68.09 points to close at 2,072.10. Turnover was Rs. 1.35 billion down by 47% from Friday’s level, according to Acuity Stockbrokers. 

First Capital said the market ended in the negative territory recording a market halt after two months due to the panic selling resulting from the increased number of COVID-19 cases. 

“The Index plunged within the first few minutes of trading, triggering the circuit breaker and recording an intraday low of 4,801. Subsequently the market rebounded and reached its intraday high of 4,933 during mid-day. Later it witnessed a slow downtrend and closed at 4,880, losing 113 points,” First Capital said. 

It added that the ASPI was dragged down predominantly by Nestle and John Keells Holdings. Turnover was dominated by the Banking and Capital Goods counters, contributing 71% of the total. 

The market saw a modest yet welcome net foreign inflow yesterday after many weeks. Net foreign buying was Rs. 170 million as against an outflow of Rs. 220 million on Friday. Year-to-date net foreign outflow was Rs. 22 billion, according to First Capital.

Hemas Holdings saw net foreign buying worth Rs. 100 million followed by HNB (Rs. 21 million), Commercial Bank (Rs. 17.6 million) and TeeJay Lanka (Rs. 16 million).

Deals on Hemas also accounted for 22.4% of the day’s turnover. The share price of Hemas Holdings decreased by Rs. 1.70 (2.86%) closing at Rs. 57.80 whilst foreign holdings increased by 1,716,077 shares.

NDB Securities said the ASPI closed in red as a result of price losses in counters such as Nestle Lanka, John Keells Holdings and Commercial Bank.

High net worth and institutional investor participation was noted in Hemas Holdings while mixed interest was observed in John Keells Holdings, Hatton National Bank and Commercial Bank. Furthermore, retail interest was noted in LOLC Holdings, Seylan Bank and Tokyo Cement Company.  

The Capital Goods sector was the top contributor to the market turnover (due to Hemas Holdings and John Keells Holdings) whilst the sector index lost 2.74%. The share price of John Keells Holdings lost Rs. 2.40 (2.17%) to close at Rs. 108.10.

The Banking sector was the second highest contributor to the market turnover (due to Hatton National Bank, Commercial Bank and Sampath Bank) whilst the sector index decreased by 3.74%. The share price of Hatton National Bank moved down by Rs. 3.80 (3.52%) to close at Rs. 104.30 while the share price of Commercial Bank recorded a loss of Rs. 3.10 (4.19%) to close at Rs. 70.80.

Furthermore, the share price of Sampath Bank declined by Rs. 4.80 (3.96%) to close at Rs. 116.40.