ECONOMYNEXT – Sri Lanka stocks plunged 2.11 percent, diving 127.25 points below the psychological 6,600 points in the worst fall since April 23 after the Easter Sunday bombings, driven by heavy retail selling, brokers said.
The Colombo All Share Price Index (ASPI) closed at 5,898.89, falling for the third straight day.
“There was heavy retail selling and weak buying power,” a broker said.
“Jittery retailers who are on margin sold with thin turnover.”
Janashakthi Insurance fell from 31.40 to 26.20 rupees at one point with only 100 shares traded, a broker said, before recovering to 30 rupees.
Wednesday was the steepest fall in Colombo stocks after April 23, following the Easter Sunday terror attacks, when the ASPI had fallen 3.63 percent, the worst in seven years.
The ASPI is now at the lowest level since October 23.
The ASPI gained to an intra-day high of 6,031.06 within half-hour into trading before falling throughout the day to a low of 5,896.31 and closed marginally up at 5,900.57.
Meanwhile, S&P SL20 Index of more liquid stocks closed 2.05 percent or 58.58 points down at 2,799.41.
Market turnover was 624 million rupees while 17 stocks gained and 167 fell.
There was low foreign investor participation, with net foreign sales of 2.4 million rupees.
The banking and finance sector index closed 2.74 percent lower while the construction sector index closed 5.63 percent lower. Retail selling centred on Access Engineering, Browns Investments and LOLC Holdings.
LOLC Holdings closed 9.50 rupees down at 155.40 rupees a share, contributing most to ASPI’s fall.
Hatton National Bank closed 8.70 rupees to 160.30 rupees a share while Distilleries Company closed 70 cents lower at 16.80 rupees a share, also contributing greatly to the ASPI downturn.
Global markets were also shaken by unrest in Iran, though Sri Lanka does not usually react very strongly to global events.
Sri Lanka’s economy is expected to recover in 2020, but there have been ‘stimulus’ measures announced, which has raised concerns over monetary and economic stability.
The Colombo All Share Index’s 6,000 point level is also a psychological resistance point, which may trigger selling.
(Colombo/ Jan 08/ 2019)