ASI tops 6,000 level and dips on profit taking in blue chips

The Colombo stock market yesterday enjoyed a momentary peak when the All Share Index (ASI) surpassing the psychological resistance level of 6,000 points, before profit taking on blue chips dragged it down, whilst turnover was a healthy Rs. 1 billion.

“The benchmark index surpassed the 6,000 mark during the first hour without much resistance and turnover. However, following the profit taking in some of the blue chip counters, the index glided down to  close in negative territory at  5,964, a marginal decline of 8 points,” Softlogic Stockbrokers said.  

“Despite the ASPI managing to cross the 6,000 level for the first time after early January, the trend did not sustain as the broader market fell 7.7 points to close the day in the negative territory,” NDB Stockbrokers added.



DNH also said the Bourse opened on a positive note crossing the key psychological resistance level of 6,000 but succumbed to profit taking, closing the session at 5,964, whilst Asia Wealth said: “The activities at the Bourse showed hype during initial hours of trading with the ASI reaching the 6,000 level, however did not sustain towards the latter part of trading, with both indices falling in the red at the closure.”



Lanka Securities said cash map for yesterday was 71.14%, which was encouraging as there was only one crossing. Foreign participation was 29.9% of total market turnover and net foreign buying was Rs. 111.6 million.

Softlogic said John Keells Holdings (-0.7%), Nation Lanka Finance (-1.5%), Nestle (-2.0%), and Aviva NDB Insurance (-9.2%) led to the downfall of the index.

JKH touched its 52-week high again at Rs. 230, before witnessing some selling pressure, bringing the share down. The counter also recorded the only crossing for the day of 223,000 shares at Rs. 230. The counter closed the day with a dip of 0.7% at Rs. 227.50.

Dialog gained strong investor attention with three large blocks of 1.6 million, two million and 15.6 million shares being dealt on board at the same price of Rs. 9.10. The counter recorded 21 million in volume with Rs. 191.7 million turnover as it traded between Rs. 9 and Rs. 9.20 to finally close the day at Rs. 9.10, marginally up 10 cents.

Touchwood, a counter which has been generating a steep upward trend over the past two weeks, saw a sharp dip in value  as the counter fell 12.2% during the  to close the day at Rs. 18.70.

Heavy volumes of 7.2 million (with Rs. 146.7 million turnover) were recorded in the counter as it fell to a low of Rs. 17.90 before marginally recovering. Strong selling pressure was witnessed in the counter which is one of the retail favourite counters, according to Softlogic.

It also said LOLC regained some buying interest with 2.2 million shares changing hands for Rs. 113.7 million. Accumulation in the counter was prevalent with the counter gaining a mere 20 cents despite strong buying interest. The counter closed the day at Rs. 50.60.

NDBS said institutional and high net worth interest was seen in index heavy John Keells Holdings, whilst Commercial Bank and Central Finance witnessed further accumulation. Retailers were seen active in counters such as Touchwood and LOLC.

It said Access Engineering also contributed Rs. 47 million for turnover with its share price gaining 10 cents to close at Rs 21.90.

The Bank, Finance and Insurance sector became the top contributor to the market turnover (due to LOLC) and the sector index lost 0.98%. The share price of LOLC gained Rs. 0.10 (0.20%) to close at Rs. 50.60.

The Telecommunication sector was the second highest contributor to the market turnover (due to Dialog Axiata) and the sector index increased by 1.00%. The share price of Dialog closed flat at Rs. 9.

The Land and Property sector also contributed heavily to the market turnover (due to Touchwood) and the sector index edged up 0.35%. Touchwood’s share price dipped Rs. 3.30 (15.49%) to close at Rs. 18.00.

DNH Financial said losers modestly outpaced gainers, with George Steuart, Touchwood and Lake House Printers, declining by 18.9%, 15.5% and 10.1%, smoothening out advances in Ceylon Printers, Mercantile Shipping and Equity One, which rose by 11.9%, 11.3% and 10.8% respectively.

“Profit taking seems to continue following the sharp upward trend that was witnessed during the last month as the 6,000 mark appears to be a psychological barrier for the investors,” Softlogic said, adding, “We at Softlogic Equity Research have identified two new sectors, namely Finance and Hotel, that require investor attention. The Finance sector profitability is likely to have bottomed out, while the Hotel sector is likely to witness a strong winter season.”

DNH Financial said even though the market has been largely trading in a narrow band during the past week, its upward days have been accompanied by generally increasing volumes while downward days by decreasing volumes.

“Given that share volumes reflect the supply and demand for stocks and consequently investor confidence, this in our view says a considerable lot about market sentiment, which appears to be largely positive. While we are encouraged by the Bourse’s break through the 6,000 level during today’s trading session, we continue to advise investors to however adopt a highly selective approach investing in quality stocks and maintaining a healthy investor horizon,” DNH added.