April 07, Colombo (LNW): The Colombo Stock Exchange endured a significant downturn today, with the All Share Price Index (ASPI) plunging over 700 points and slipping beneath the psychologically important 15,000 mark.
This sharp decline, amongst the steepest in recent memory, comes as ripples from intensifying global trade disputes reached Sri Lankan shores, unsettling local investor confidence.
A wave of selling swept across the exchange from the opening bell, spurred by growing apprehension over fresh tariff announcements by the United States.
These measures have sparked renewed fears of a trade standoff involving several major economies, triggering a chain reaction of volatility throughout financial markets worldwide.
In response, numerous countries have begun urgent negotiations with Washington in an effort to recalibrate existing trade agreements and avoid further economic destabilisation.
At home, the Colombo bourse mirrored the wider turmoil. The market opened with unusually high turnover, and within the first hour of trading, the S&P SL20 Index nosedived, activating an automatic circuit breaker—a rarely used mechanism designed to cool excessive market fluctuations.
By the close of trading, the ASPI had retreated to 14,660.45, marking a 4.64 percent drop, whilst the S&P SL20 fared worse, plummeting 5.92 percent to close at 4,264.84. Total market turnover reached Rs. 6.47 billion, with 188.3 million shares changing hands.
Banking and capital goods counters bore the brunt of the sell-off, as jittery investors exited positions en masse, fearing extended fallout from global events. Notably, Commercial Bank PLC emerged as the biggest drag on the index, pulling it down by 64.5 points.
Conversely, Nation Lanka Finance PLC managed to lend a sliver of positive momentum, contributing a modest 1.65 points to the ASPI.
Despite the gloomy atmosphere, block transactions drew some attention. Diesel & Motor Engineering PLC (DIMO) was the focus of one of the session’s largest negotiated deals.
A substantial crossing valued at Rs. 948.68 million took place, with 0.9 million shares exchanged at Rs. 1,050 each—considerably higher than the stock’s closing price of Rs. 956.75, suggesting a degree of institutional confidence in the company’s fundamentals even amid broader market weakness.
Market analysts have warned that unless global diplomatic channels succeed in de-escalating trade tensions, Sri Lanka’s equity market may continue to face pressure in the days ahead.
With the island’s economy already navigating a fragile recovery path, prolonged external shocks could undermine investor sentiment further and complicate fiscal stability efforts.
Stakeholders across financial and policy-making circles are now watching developments in Washington closely, hoping that emerging consensus amongst trade partners will lead to a de-escalation of tariff measures.
A reversal or softening of the current trajectory may be critical not just for global markets, but for restoring investor trust in frontier markets like Sri Lanka’s.
