By: Staff Writer
February 06, Colombo (LNW): The Colombo stock market faced a significant downturn as investor sentiment reversed sharply, leading to a major sell-off. The sharp decline comes after a strong start to the year, with January posting notable gains.
The market saw Rs. 188 billion in value wiped off, with the benchmark index losing over 500 points, as investors were on a selling spree in a U-turn of sentiments.
However, concerns over policy missteps and conflicting statements have unsettled investors, resulting in a major drop in market value.
The benchmark All Share Price Index (ASPI) plummeted by 500 points, equivalent to a 3% decline, while the S&P SL20 index dropped by 3.3%. This marks the biggest intraday loss since April 2022, when the ASPI fell by over 600 points.
The market’s overall capitalization dipped by Rs. 188 billion, bringing it below the Rs. 6 trillion threshold to close at Rs. 5.86 trillion. Trading activity saw a turnover of Rs. 6.35 billion, with 241.3 million shares changing hands.
Analysts attributed the market slump to profit-taking after January’s robust 7% gain. Additionally, uncertainty fueled by policy inconsistencies further dampened investor sentiment. The number of gainers remained low at just 16, with Ceylinco Insurance (CINS) and Cargills (CARG) among the few bright spots.
Banking stocks exerted considerable downward pressure on the ASPI, with Hatton National Bank (HNB), Commercial Bank (COMB), Melstacorp (MELS), Sampath Bank (SAMP), and National Development Bank (NDB) emerging as the top negative contributors. Despite a recovery in turnover compared to the previous session’s Rs. 3 billion, the figure remained below the monthly average of Rs. 6.8 billion.
Sector-wise, the Insurance sector led with a 22% contribution to turnover, followed by Capital Goods and Food, Beverage & Tobacco, which jointly contributed 35.3%. Foreign investors remained net sellers, recording an outflow of Rs. 344 million.
High net worth and institutional investors showed interest in Ceylinco Holdings, Teejay Lanka, and Ceylon Cold Stores, while mixed retail interest was observed in Industrial Asphalts, SMB Leasing, and Agarapatana Plantations. Retail investors were active in Browns Investments, John Keells Holdings, and Hatton National Bank.
Ceylinco Holdings emerged as the top performer in the Insurance sector, with its share price surging by Rs. 243.25 (7.85%) to Rs. 3,342.25. The Capital Goods sector, led by John Keells Holdings, contributed significantly to turnover, though the sector index declined by 3.28%. John Keells Holdings’ share price fell by Rs. 0.60 to Rs. 22.
Other key stocks included Browns Investments, Teejay Lanka, and Hatton National Bank. Browns Investments saw its share price decline by Rs. 0.40 to Rs. 8.50, Teejay Lanka dropped by Rs. 1.20 to Rs. 54.80, and Hatton National Bank shed Rs. 10.50 (3.05%) to close at Rs. 334.
With uncertainty prevailing, investors are closely monitoring market movements and policy directions to gauge the potential for recovery in the coming weeks.
