The severe impact of the 44% tariff imposed by US President Donald Trump on Sri Lankan products was felt sharply on Monday, April 8, when the Colombo Stock Exchange (CSE) suffered significant losses. The market experienced a trading suspension as the benchmark ASPI fell by 4.6%, or 712 points, while the S&P SL20 plummeted by 6%, triggering a temporary halt in trading.
Since the announcement of the tariff, the CSE has seen a loss of nearly Rs. 500 billion in value. Over the past three days, Rs. 435 billion was wiped off the market. As a result, the year-to-date negative returns of the ASPI and S&P SL20 have surged to over 8% and 12%, respectively. This drastic drop reflects global market sell-offs, with analysts calling it a “bloodbath,” particularly in Asia, following the US tariff announcement.
Monday’s trading was marked by panic-driven selling, particularly by retail investors, which led to a sharp decline in turnover to Rs. 6.47 billion. The Banking sector bore the brunt of the losses, with significant declines in shares of Commercial Bank (COMB), Hatton National Bank (HNB), and Sampath Bank (SAMP). Other notable stocks like MELS and John Keells Holdings (JKH) also contributed to the downturn.
The market saw heavy selling in the early session, and the 5% drop in the S&P SL20 triggered a 30-minute circuit breaker. Although there was a brief recovery after the halt, it couldn’t be sustained, and selling pressure resumed, pushing indices lower. The Banking sector led the decline, followed by the Capital Goods and Retail sectors.
Despite the market’s decline, foreign investors recorded a net inflow of Rs. 300.3 million, with net buying in BUKI.N and net selling in JKH. High net worth and institutional investors were active in stocks like Diesel & Motor Engineering, John Keells Holdings, and Teejay Lanka, while retail investors showed interest in RIL Property and LOLC Finance.
The overall sentiment was negative, with 220 decliners and only 19 gainers. The sharp downturn reflects the broader global uncertainty and the immediate effects of the US tariff on Sri Lanka’s economy.
