Stock market manages to close positive after 5 weeks of negativity

The Colombo stock market managed to close on a positive note after languishing with five weeks of negativity though investor sentiment remains besieged with worsening macro situation in the country.

The ASPI closed the week gaining 135.59 points (+1.22%) and the S&P SL20 gaining 77.11 points (+2.06%) thereby ending five weeks of declines. Turnover averaged Rs. 3.1 billion this week though lower in comparison to Rs. 3.9 billion in the previous week.

Asia Securities said following two sessions of price declines, the indices regained ground on Friday supported by price gains in EXPO (+3.8%), LOLC (+4.6%), CLC (+7.1%), and HAYL (+4.0%).

However, trading share volume remained at relatively lower levels amounting to 77.6 million (previous session-73 million). Turnover stood at Rs. 3 billion up from Rs. 2 billion on Thursday with EXPO leading at Rs. 507 million followed by LOLC (Rs. 384 million) and CLC (Rs. 347 million).

Foreigners continued as net buyers generating a net inflow of Rs. 68 million led by net buying in EXPO (Rs. 43.5 million), HHL (Rs. 41.3 million) and TJL (Rs. 10.5 million).

“Earlier, the market opened on a downbeat note witnessing a bout of broad-based selling pressure as local investors awaited direction cues following the Central Bank’s announcement of 100 bps increase in the key policy rates. The ASPI reached an intra-day low of 11,054 (-109 points),” Asia said. It noted that ASPI was dragged down by early declines in EXPO (-4.3%), LOLC (-4.5%), CLC (-3.3%) and LOFC (-4.5%). Nonetheless, the ASPI saw a quick 213-point rebound to an intra-day high of 11,267 and stabilised in the range of 11,200-11,270 for the rest of the session as retail and HNI investors repositioned themselves in the above-mentioned stocks at relatively lower prices. However, the overall market breadth remained negative with 90 price gainers and 110 decliners.

First Capital said the Bourse thrives into the green zone as investors started bargain hunting following the price decline for the past two days.

“Index continued to fall lower in the beginning but took a reversal note afterwards while hitting an intraday high of 11,274. Since the results of the policy review meeting came out as expected, market gradually started to recoup earlier losses and traded positively throughout the session before closing at 11,243, gaining 81 points,” said First Capital adding turnover was led by Diversified Financials and Capital Goods sectors accounting for a joint contribution of 52%.

NDB Securities said high net worth and institutional investor participation was noted in John Keells Holdings, Hemas Holdings and Hayleys. Mixed interest was observed in Expolanka Holdings, Lanka IOC and Royal Ceramics, whilst retail interest was noted in Browns Investments, Commercial Leasing and Finance and LOLC Finance.

Diversified Financials sector was the top contributor to the market turnover (due to LOLC Holdings and Commercial Leasing and Finance), whilst the sector index gained 2.44%.

The share price of LOLC Holdings gained Rs. 42 (4.56%) to close at Rs. 963.25. The share price of Commercial Leasing and Finance moved up by Rs. 3.20 (7.08%) to close at Rs. 48.40.

The Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings), whilst the sector index increased by 0.26%. The share price of John Keells Holdings recorded a loss of 25 cents (0.17%) to close at Rs. 145.75.

Expolanka Holdings and Browns Investments were also included amongst the top turnover contributors. The share price of Expolanka Holdings increased by Rs. 10.25 (3.79%) to close at Rs. 280.75. The share price of Browns Investments appreciated by 10 cents (0.86%) to close at Rs. 11.70.