Sri Lanka stocks end three-day rally
ECONOMYNEXT – Sri Lanka stocks ended 0.1 percent lower on Tuesday, ending a three-day rally amid continued foreign selling and concerns over the novel coronavirus impact on corporate earnings, market brokers said.
Colombo’s All Share Price Index fell 4.40 points to close at 5,034.45.
ASPI opened on a positive note at 5.051.22 but stumbled minutes into trading and continued on the negative territory to close at red.
The S&P SL20 index of most liquid stocks fell 0.34 percent or 7.52 points to close at 2.173.61.
The market turnover was 984 million rupees with 65 stocks making gains and 74 making losses.
Foreign investors continued to sell in the market.
Market brokers said heavy foreign selling pressure was seen on Hatton National Bank (voting and non-voting) and Sampath Bank counters.
Net foreign selling in the market amounted to 189 million rupees on Tuesday, down from 389.5 million rupees at Previous day’s closing while the overall net foreign selling in the market stood at 15.70 billion rupees from 11 May.
Ceylon Tobacco Company contributed most to ASPI’s fall, slipping 10.00 rupees a share to trade at 940.00 rupees.
Other stocks that contributed to ASPI’s fall were John Keells Holdings stock down 50 cents a share to trade at 113.00 rupees while Softlogic Life Insurance stocks fell 1.50 rupees a share to trade at 29.40 rupees.
Market analysts said the market moved to negative territory ending a three-day rally after a rating agency report on company earnings of Sri Lankan firms raised concerns amongst the investors.
The Fitch Ratings report said the Sri Lankan tracked by the agency are expected to lose 30 billion rupees in revenues in the year to March 2021.
According to the agency, if it includes the two telecos it tracks, then the loss would be 40 billion rupees.
About 35 percent of the revenue fall would come from hotels, which are expected to lose 75 percent of their revenues in 2021, the agency said.
“We expect consumer durables retailers to account for the second-highest revenue drop; the sector represents 30 percent of the aggregate revenue loss,” Fitch said.