CSE trading halts twice; indices dip steeply

By Hiran H.Senewiratne 

Trading at the CSE was halted twice yesterday. On the first occasion, the index of liquid stocks fell 8.13 percent, triggering a 7.5 percent circuit breaker. Trading  was halted for a second time  at  12.18 hours, when the index fell 5.0 percent.

Initially, CSE’s benchmark All Share Index fell 6.47 percent or 500 points and there was heavy selling pressure, stock brokers said.

Stock buyers who had bought on margin or credit were also trying to cut positions. The index had been going up partly due to low interest rates amid record excess liquidity in money markets. Many investors are also sitting on capital gains after a 30 percent gain in January 2021, market sources said.

Analysts said the CSE had fallen by nearly 15 percent  from 9,000 points to 7,735 points within days, perhaps exposing fickleness, but others said fundamentals were intact based on earnings and valuations, hence investor behaviour was unwarranted. 

Amid those developments, the market witnessed a fast recovery in the latter part of the day and huge selling pressure was noted in the LOLC Group and Vallibel One. Further, Carsons Cumberbatch and Vallible One were two companies that lowered the index. In the latter part of the day, the  All Share Price Index had fallen 134.62 points and the S and P SL20 had declined by 48.42 points.   During the day only 76 companies’ share prices moved up and 156 recorded a drop in prices, market sources said. 

The turnover stood at Rs. 4.38 billion without any crossings. In the retail market, top five contributors to the turnover were, Expolanka Rs. 563 million (12.5 million shares traded), Browns Investments Rs. 458 million (90.8 million shares traded), LOLC Holdings Rs. 404 million (one million shares traded), Royal Ceramic Rs. 381 million (1.4 million shares traded) and JKH Rs. 352 million (2.3 million shares traded). During the day, 198 million share volumes changed hands in 37,000 transactions.   

Sri Lanka rupee was quoted around 195.00/198.00 levels in the one-week forwards market on Wednesday, while bond yields edged up on selling pressure, dealers said.

The rupee last closed in one-week forward market at 196.00/198.00 levels on Wednesday. The rupee closed wide 194.00/198.00 to the US dollar in the spot market on Wednesday.