ECONOMYNEXT – Sri Lanka All Share Price Index fell 5 percent on Thursday (24), its worst loss in near two years, with investors continued to sell shares due to on going fuel shortage and economic crisis in the market amid margin calls, brokers said.
The main All Share Price Index (ASPI) plunged 560.71 points and closed at 10,657.05, its lowest since November 10, last year. The index suffered its worst percentage loss since March 20, 2020, the bourse data showed.
S&P SL20 of the most liquid stocks nosedived 5.46 percent or 207 points to 3,584.58 points.
“One reason is Russia invading Ukraine today, which will definitely affect the international market and fuel prices globally.” A Colombo based Market analysts told EconomyNext.
“And other reasons are the margin calls and ongoing economic crisis in the market as well as investors taking profit in the month end”
Colombo Stock Exchange halted trading at 1.42 pm to allow the market to cool off after an index of liquid stocks plunged over 5 percent in intra-day trading. However, the fall continued even after the cooling off period.
This is the fourth session that the market was halted in four days due to S&P SL 20 index falling below 5 percent.
The market has lost 12.2 percent so far this week and 18.1 percent so far in February. It has fallen 12.8 percent so far this year after being one of the world’s best stock markets with 80 percent return last year.
Analysts predicts, the current status of the stock market to continue till Monday (28).
Sri Lanka stocks have risen steadily for several and is going through a correction, amid macro-worries.
According to analysts, ongoing power cuts, fuel shortage and forex crisis in the country have demotivated the investors with the country is witnessing the impacts of forex crisis both at macro and grass root level.
Stock have been driven by loose monetary policy both at home and abroad. Some stock have been bought as an inflation hedge with the rupee expected to fall.
Others have also benefited from imports controls.
Sri Lanka’s loose monetary policy however has led to increasing external weakness which has translated into disrupted supplies.
Expolanka Holdings, the market heavyweight slipped 9.7 percent to close at 240.25 rupees a share, while LOLC Holdings down 10.1 percent to close at 828.75 rupees a share. provisional shortage.
Royal Ceramics Lanka fell 10.6 percent to close at 52.10 rupees a share. Browns Investment fell 10.4 percent to close at 10.30 rupees a share. (Colombo/Feb24/2022)