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Sri Lanka stocks extend gains amid optimism on containing Covid-19 cluster

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange rose 1.3 percent as a authorities stepped up efforts to contain a Coronavirus cluster with brokers says similar events have happened in other countries.

“In some emerging markets, equity indices fell initially—like the Colombo Stock Exchange indices did on Monday, 5 October—but have quickly rebounded,” Asia Securities, a Colombo-based brokerage said.

“In Vietnam, for example, the main index on the Ho Chi Minh Stock Exchange is up 8% from the point before the second wave was detected in July.”

“Similarly, in Malaysia, the main stock market index has bounced back to pre-second wave levels in early September.”

Asia Securities said in Australia after a ‘second wave’ markets are up 2 percent. In Italy after a ‘second wave’s markets have recovered and the index is down 4 percent.

Unlike ‘second wave’ countries like Italy or Malaysia, Vietnam experienced only a cluster, centred around Da Nang city in the Centre, believed to have been triggered by illegal Chinese migrants, which authorities clamped down swiftly, analysts familiar with the country say.

Evidence so far suggests Sri Lanka is also experiencing a cluster though the source of the infection has not been tracked down so far, raising some concerns over the existence of other cases.

Sri Lanka stocks closed 1.30 percent up on Friday, amid numbers in the newest Coronavirus cluster increasing, provisional data showed.

Sri Lanka reported 29 new Covid-19 cases carrying the total to 4,488 within a span of 24 hours ending at 11 am today, NOCPOC officials said as the country teetered on a second wave.

The All Share Price Index had climbed to 5,798.72 up 74.18 points.

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The All Share Price index fell from 6,050.17 on Friday to 5,534.61 on Tuesday. It has since rebounded to 5,798.72.

S&P SL20 index of more liquid stocks gained 1.27 per cent or 29.53 points to end at 2,346.68.

The market turnover was 3.05 billion rupees with 138 stocks making gains and 55 making losses.

Expolanka Holdings stocks traded 1.30 rupees up a share up at 14.60 rupees.

Other stocks which contributed to ASPI’s gain were Asiri Hospital Holdings PLC trading 2.00 rupees up at 22.50 rupees a share while Nestle Lanka gained 37.50 rupees to trade at 1,088.60 rupees a share.

Teejay shares closed 1.50 rupees up at 32.80 rupees a share while other firms like Haycarb PLC shares traded 30 cents up at 311.30 rupees a share and Dipped Products shares increased 3.60 rupees up at 218.90 rupees a share.

(Colombo/Oct09/2020)