Stock market plunges sparking fresh fears among investors

The Colombo stock market suffered its sharpest fall in recent months triggering fresh concerns among investors though turnover remained healthy.

The All Share Price Index plunged 2.6% or over 338 points and the S&PSL20 fell sharper by 2.84% or over 123 points. Turnover was Rs. 9 billion involving over 263 million shares. 

Asia Securities said the he indices closed sharply lower, continuing their downward trajectories for the second consecutive session dragged by price declines in EXPO (-8.8%), AAIC (-22.7%), SCAP (-15.1%) and LOLC (-6.3%). 

“The ASPI slipped to 12,500 levels, its lowest this year and recorded its biggest single-day decline in more than two months, declining 338 points (-2.6%). Similarly, S&P SL20 index also closed with a loss of more than 2% (-123 points|-2.8%).,” Asia said. 

Turnover was led by EXPO (Rs. 2,283mn), AAIC (Rs. 876mn) and LOFC (Rs. 589mn). Overall market breadth was weak with 34 gainers and 195 decliners.

Asia also said that foreigners recorded a net outflow of Rs. 48 mn while their participation marginally increased to 1.5% of turnover (previous day 1.2%). Net foreign buying topped in DIAL at Rs. 35.4mn and selling topped in SHL at Rs. 20 mn.

First Capital said the Bourse closed lower and remained in the red zone while recording the highest intraday loss in nearly two and half  months due to increased skepticism among investors over prevailing uncertain economic conditions. 

“The Index gained 54 points within the first few minutes of the session and eventually began to lose as the sell-off of major retail favourite stocks continued. As investors panicked and urged to collect profits throughout the session, the market displayed a continuous downtrend and led the index to close to a 1-month low of 12,584,” First Capital said adding turnover was led by a joint contribution of 44% from Transportation and Food, Beverage and Tobacco sectors. 

NDB Securities said high net worth and institutional investor participation was noted in Ceylinco Insurance, Melstacorp and LOLC Finance. Mixed interest was observed in Expolanka Holdings, Softlogic Life Insurance and Lanka IOC, whilst retail interest was noted in Renuka Agri Foods, Browns Investments and Softlogic Capital. 

The Transportation sector was the top contributor to the market turnover (due to Expolanka Holdings), whilst the sector index lost 8.82%. The share price of Expolanka Holdings decreased by Rs 30.50 (8.84%) to close at Rs 314.50. Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments), whilst the sector index decreased by 2.22%. The share price of Browns Investments recorded a loss of 50 cents (3.31%) to close at Rs 14.60. Softlogic Life Insurance, LOLC Finance and Softlogic Capital were also included amongst the top turnover contributors. The share price of Softlogic Life Insurance lost Rs 41.50 (22.68%) to close at Rs 141.50. The share price of LOLC Finance moved up by Rs 0.80 (3.08%) to close at Rs 26.80. The share price of Softlogic Capital declined by Rs 2.80 (15.05%) to close at Rs 15.80.